Spillover And Injection Effect In Price Transmission Mechanism Between China And U.S

In an open economy the price level between countries described endogenous transmission mechanism, the paper tries to answer the two countries at different levels and price levels of the spillover into effect, thereby strengthening our policy-makers on changes in the price level in China the expected accuracy of the path, while the United States effectively avoid the dramatic price fluctuations. In accordance with the overall research framework, firstly the price level Sino-US collaboration and the general covariance verified the facts, and then analyzed by the VAR model the price level of the two countries and infiltration of endogenous spillover effects, both on VAR estimation results, measure the degree of response between the two shocks and the reaction path, in order to make appropriate policy recommendations.Upholding the theory, the principle means of evidence obtained in this paper the following basic conclusions:(1) the many factors that affect the price level eventually the price level by examining the different levels (CPI price index and PPI price index) to pass on the price level of relations between the prediction and simulation.(2) PPI and CPI price index price index is not a simple relationship between the upstream and downstream, both from the nature of relationships on a two-way transmission in an open economy, both also used as the basic means of international price transmission.(3) China and the U.S. CPI and PPI price index price index over the same period and across all of the conditions, significant synergistic trends, economic globalization and China's growing international status and trade reinforced this trend.(4) United States means the price volatility through the formation of CPI price level of China's overflow and into effect, and the help of China's internal CPI price index price index and PPI logic of two-way transmission of the final substantive overall price level in China. Beware CPI ways to avoid overflow and into the United States is valid and effective measures to price shocks.(5) price fluctuations in China and the United States does not materially affect the price level, although the allocation of resources in the international situation, China's price level will affect the U.S. PPI price index level, but because there is no obvious within the United States CPI and PPI links, making China has formed on the substantive impact of the U.S. price level, the so-called "China exporting inflation" is not established.(6) under dynamic conditions, relative to the price impact of China on the United States, the U.S. price fluctuations on the Chinese price level effects of overflow and into a higher degree of persistence longer; Granger test showed that U.S. influence in China there are significant causal relationship.