The Conduction Mechanism Of PPI And CPI In China Under The New Economic Norm

The conduction mechanism of CPI and PPI is the focus of the academic research in the macro economy in recent years.The research has important reference value for the formulation of the macro control policy;Since entering the new economic norm,China's PPI and CPI trend has positive and negative deviation between the two "price scissors" gap has exceeded the highest value,and the two positions of the peaks and troughs still roughly corresponding;After a review of the relevant literature,it is found that there is a lot of controversy in the current scholars in the CPI and PPI transmission mechanism of the research conclusions,some scholars may exist in the process of “missing important variables”.In view of this,it is necessary to study the conduction mechanism of PPI and CPI under the new economic normal background.In this paper,monetary factors(M2)into the framework of the overall analysis,through the establishment of PPI,CPI and M2 of the three variables of the VAR model analysis of the relationship between the three variables.The results show that: in the short term with one-way transmission from PPI to CPI,and in the long term,PPI and CPI is a two-way transmission relationship,therefore,in the new normal context,in general the conduction mechanism of PPI and CPI in China with the theory of the transfer price of the production chain,upstream downstream price conduction more open,this has to a certain extent,explains the PPI and CPI still corresponds roughly in the overall trend;in the long term,there is also a reverse of PPI CPI forced mechanism can explain the long-term deviation between the two in a certain degree.The study also shows that,due to the addition of M2,the system can be quickly stabilized after impact,indicating that M2,CPI and PPI constitute the three variable VAR model is more stable.The main body of this paper is divided into five chapters.The structure and content of the article are as follows: The first chapter is introduction.Firstly,it analyzes the new characteristics of PPI and CPI in the context of economic new normal and the significance of the research on the relationship between the two;then on the domestic and foreign on the CPI and PPI transmission mechanism of the relevant literature system finishing,the author found that the existing literature controversy exists on the conduction relationship between PPI and CPI,based on the existing literature review found that the current lack of research,to find a feasible research direction.The second chapter is the theoretical analysis,this chapter explains the relationship between PPI and CPI.First of all,the basic form the simple introduction of PPI and CPI;secondly,introduced the production chain transfer theory,demand theory,"search costs" theory and "trigger price" theory of PPI and CPI transmission mechanism theory;finally,analyzed the reason of PPI and CPI in normal economic background long-term deviation from the theoretical point of view.The third chapter and the fourth chapter is the empirical analysis.In the third chapter,based on the two variables of PPI and VAR,the CPI model is established,and on this basis,the Granger causality test and impulse response analysis are carried out to study the transmission mechanism between the two of the two variables.In the fourth chapter,the monetary factors are added to the empirical model,and the CPI,PPI and VAR three variables M2 model are established.On this basis,the Granger causality test and impulse response analysis are further carried out on the three,by studying the relationship between CPI and PPI after adding monetary factors,the study found that the three variable VAR model with the addition of M2 is more robust than the model with two variables.The fifth chapter is the conclusion and the policy suggestion,and draws the conclusion after the analysis of the empirical results,and gives the relevant policy recommendations.