A Study On Transduction Pathways And Prevention Countermeasures Of Transmitted Inflation In China

Since the second half of2010, inflation has become a hot issue in the economy again. The consumer price index CPI of residents in our country increased from3.3%of July2010to4.6%of December2010, in May2011CPI index has reached5.5%, and then, CPI were all above6.0%from June to September in this year. The rising trend did not relax until the end of the year, but annual CPI increase of2011was5.4%, which was still far above early goals of4%. In the second half of2007and the first half of2008, our country also experienced a domestic prices rising overall, and CPI index once had reached8.7%. In terms of the formation reasons and the corresponding strategies of Our Country, this round of inflation have many similarities to that happened in2007-2008.In recent years, as the inflation pressure of our country continuously increased, characterized by transmitted pattern,the study of inflation has caused extensive concern in the academic community. The transduction pathways of transmitted inflation is diverse and complicated, so the selection and adjustment of the countermeasures is very easy to appear systemic error. By adopting monetary policy, including raising reserve requirements and rediscount rates, the price rises has been brought under control in short term, but the prevention of transmitted inflation in long-term was still difficult. The type of transduction pathways of transmitted inflation in our country and the influence of them to the price level are very important for the selection of the appropriate countermeasures.This paper focused on the transduction pathways and countermeasures of transmitted Inflation. First, a summary of comprehensive theory of researchers was made in the study, then the the type of transduction pathways of transmitted inflation in our country was analyzed.With opening wider to the outside world in our country after return to WTO,prices for domestic goods gradually integrate with the world market, the study concludes that on one hand through cost input mode or a aggregate demand-supply model,prices for domestic goods was promoted by the rise of international market price;and on the other,favorable trade balance and international capital flows caused foreign exchange reserves jumped, funds outstanding for foreign exchange also increased accordingly,leading to the domestic money supply to increase,pull the consumer prices,rising asset prices.Finally,from the prevention countermeasures of transmitted inflation experience in1970in Japan,for prevention of transmitted inflation in long-term in Our country,this paper puts forward several policies and suggestions.