Study On The Influence Of The International Crude Oil Price Fluctuations On China’s Output And Prices

Our country is the world’s second-largest economy and is also a big consumer of oil resources, and the demand for oil is increasing. Oil resources, as an indispensable part of the modern economic, its price volatility will affect the dimensions to the macroeconomic. To avoid fluctuations of the international oil prices to adversely affect the macroeconomic environment in China, this paper will carry on the concrete study aiming at the problems.This paper first introduces the situation of the international oil price fluctuations in the different period of time and the politics, economy reasons which lead them to the situation, then summarizes the current status of crude oil at home and abroad. And we realize that the increasing of the global oil supply and downturn of the demand for oil in the world due to the recession of the world economy attribute to the rapid fall of the global oil prices. For our country, crude oil import dependence degree is still high, and crude oil importer is single, which will be a threat to China’s oil security.Second, respectively, the price of oil pricing mechanism at home and abroad is introduced, and we can further explore on domestic macroeconomic transmission effect through the analysis of the differences of mechanism. International oil price fluctuations pass to our country mainly by supply shock effect, the actual balance effect, the effect of inflation and monetary policy effect, which affect our country’s macroeconomic indicators, but because there are some defects in the oil pricing mechanism in our country, these transmission effects will be restrained.Then this paper adopts the method of structural vector auto-regression(SVAR) and use the help of impulse response and variance decomposition method to do the empirical research of the impact of oil price fluctuation bring to China’s macroeconomic indicators including GDP, price level and M2. The research results show that the rise in international oil prices will reduce domestic output, and make the rising price level in our country through a series of transmission mechanism, but the rise of consumer price index(CPI) is weaker than PPI, when the domestic price level rises, the government tends to take tight monetary policy, which will rise up interest rate and reduce the output.Finally based on the results of empirical study and the current status of energy in our country, we have put forward the corresponding policy recommendations from the supply, the development of new energy, industrial structure adjustment and how to set up the financial markets in energy to ensure the healthy development of China’s energy security and economic.