Study On The Transmission Mechanism Of PPI Food And CPI Food

CPI and PPI are two important indexes reflecting the price fluctuation in our country,which represent the total price level in different fields.Studying the price transmission relationship between the two indexes can not only through the analysis of historical data to explore the historical trend of economic operation,but also can be relatively accurate to make pre-judgmentfor the future of the overall trend of commodity prices.The food category as an important part of the CPI and the food prices will cause fluctuations of CPI.So the study of the conduction mechanism of PPI food and CPI food can better understand the internal connection between these two important indicators.The article firstly analyzes the theoretical basis of the PPI food and CPI food from the conduction theory,the specific analysis of the 13 classification price chain and the overall basic price chain,found the existing characteristics of the most upstream agricultural prices or PPI food prices have the effect on the downstream CPI food prices.Secondly,according to the monthly data and quarterly data respectively to test "PPI food toCPI food" and "the price of agricultural products to PPI food to CPI food" transmission mechanism.The empirical findings,from the monthly data,PPI food and CPI food have co-integration relationship,and PPI food is the Granger reason for CPI,but not vice versa.That exists only PPI to CPI cost-push type conduction;from the quarterly data,the PPI food price changes can positively transfer to the CPI food,CPI food price changes can not reverse conduction,the evidence is consistent with the monthly data;CPI food prices is the Granger cause for the agricultural production price index,CPI food price changes transmitted to the upstream;only having a demand pull to the upstream in the industry chain;impulse analysis found that,the shocks of PPI and CPI food price is presented by transmission of shocks in the price system.The main contribution of this paper is to systematically analyze the conduction path and mechanism of CPI food and PPI food,and provide empirical evidence based on monthly and quarterly data.