| With the development of economic globalization, one country’s economic operation is more and more influenced by external factors. As China, which is a country with high dependence on foreign trade, the external factors impact on the domestic economy is particularly highlighted. In order to reflect the research aim, this paper selects domestic price as the starting point to discusses the impact of external factors on the domestic economy. And this paper will try to find the influence of input factors on China’s price.This thesis firstly introduces the definition of inflation and imported inflation, analyzes the classification and pathway of inflation and imported inflation. Secondly, this paper elaborates the conduction mode and effect analysis of imported inflation from the perspective of our economic operation. Then we analyze the influence of input inflation on China price quantitatively by considering the economic data from2005to2011. Finally, we give management policies on price fluctuation in china.From the results of the analysis, we can see that there’re three defects in China’s current price reaction system. First, the influence of input inflation on China price is significant. Second, the setting of the CPI index has some shortcomings. It can not effectively response to price fluctuations and the price impact of some factors is underestimated, leading to changes in the actual price level may be greater than the volatility of the CPI index. The third one, China’s current price fluctuations show a high degree of transitivity, so rational expectations formation is the key to solve the price fluctuations. For the characteristics of price fluctuation in China, this paper puts forward some policy suggestions:First, to realize the reasonable expectation of price level. Secondly, adjust the foreign focus policy of economic development. Thirdly, reduce food prices impact on prices fluctuation. The last one is to eliminate administrative maintenance mechanism of inflation. |
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