The Study On Regional Differences In The Distributional Effects Of Price Fluctuations

The price fluctuations will cause adjustments of relative benefits of different regions.The changes in the structure of relative prices may cause the flow of productionfactors, which will change the geographical distribution and industry distribution ofthe different industries. This will lead to change the relative income, to make someregions benefit more while some others benefit less. That is what so calleddistributional effects of price fluctuations. Due to the different constraints, thedistributional effect varies in different regions and in different historical periods. Theobvious imbalance of Chinese regional economic growth and non-synchronizationbetween the regions and the whole nation may cause different results of macro-controlpolicies of the central government. Therefore, this is an important issue that needs tobe solved in the analysis of macroeconomic performance.Firstly, this paper examines the synchronization of economic and pircefluctuations between every regions and the whole nation. Based on relevant indicators,such as growth rate of GDP, growth rate of the three industries, CPI, RPI, PPI etc.,we find that since the reform and opening up, the economic growth of the nationa andevery regions isn't same, clearly exist the east,the middle and the west three zones.The growth rate of the secondary industry between regions and the country is the mostrelevant,conpared with primary industry and tertiary industry. When it comes to theprice, whether it is the CPI, PPI, or other price indices, the correlation is significantlyhigher than that of the economic indicators. It means the price signals spread fasterthan GDP growth and three industry growth and other same kinds of variables.Subsequently, based on purchasing power parity of the International ComparisonProgram (ICP) method, this paper calculates the price differences of the variousregions in China, and then fixes the name regional economic growth data, andanalyzes the real gap in all areas of economic development after discounting price.Secondly, this paper examines the regional differences of the price's thedistributional effects and income mobility. Based on the theories and methods ofincome mobility, we analyzed income mobility in1994-2010by the average wage ofthe industry in every regions. The result shows that income mobility in China isgradually decreased. Income mobility of the three zones remained the same, but theeastern part of income mobility is significantly lower than the central and western.Subsequently, the income mobility panel regression analysis found that due to themode of economic development, economic growth, the growth of secondary andtertiary industries and fixed asset investment growth has a negative correlation withincome mobility, while CPI to some extent, narrowing the income gap betweenregions and between industries.Again, this paper examines the inter-district differences in the effects of pricefluctuations allocation and industrial chain distribution. Analysis of the variation ofinter-provincial trade through the measure of the scale of inter-provincial trade inChina, we found that the absolute number of inter-provincial trade in China isgradually expanding, but the distribution is extremely uneven across regions trade.The vast majority of multi-surplus concentrated in the eastern, while central and western regions have trade deficit. Subsequently, using the bilateral trade data andlocation quotient index, the paper studied the regional industry trade relations andregional effect of price transmission between.Subsequently, this paper analyzes the conditions of an open economy, the RMBexchange rate fluctuations on the distributional effects of the various region. Thepaper analyzed the impact of the RMB exchange rate changes on economic growth indifferent regions by using export dependence, the actual utilization of foreigninvestment and other economic variables. The GWR model shows that the RMBexchange rate will inhibit economic growth,but the eastern part will suffer more whilethe central and western regions are relatively small. Therefore, the RMB exchangerate has adverse impact on China's overall economic growth, but it may be beneficialto adjust the imbalance of China's regional economic development.Finally, based on the research conclusion, this paper give some pieces of advicefor promoting regional economic " good and fast "growth, and make summarizes forthe further research.