Analysis On The Transmission Mechanism Of Imported Inflation

Foreign inflation or inflation factor can enter a country through the pathway to form the imported inflation, so the key of imported inflation is the pathway. Understanding the pathway can help us find out the causes of imported inflation and the methods to deal with it.The article propose that there are two pathway of imported inflation , based on the "Nordic model" and a simple monetary analytical model of the balance of payments. One is international trade pathway, another is capital inflow pathway. Then the article find out the effective pathway to the inflation of china through studying of the inflation of china in 2007 and 2008 and making an empirical analysis. In the end, the article proposes some methods to respond the imported inflation.The article explains the theory of the transmission of the imported inflation first, and introduces the pathway of price transmission, total demand-total supply pathway, money supply pathway, capital inflow pathway , then, the article proposes that the pathway of price transmission and capital inflow pathway is more effective in china.In the end, the article proposes some measures to ease the imported inflation in China.