A Study On The Correlation Between International Commodity Price Volatility And Changes In China's Price Level

For a long time,the commodity price is always an important economic variable,is a very important strategic supplies and production materials,is very important for the development of macro-economy,can affect the trend of the world economy and the price level in industrialized countries.In the past ten years,the world economic situation has been fluctuating.Commodity prices have experienced several rounds of soaring and falling.The second half of 2014,the most recent round of decline cycle,has lasted more than a year,as of 2016,February,has reached a record low of 154.85 points.With China and Chinese joined WTO,for bulk commodities large-scale demand,is bound to affect the economic situation of China frequent fluctuations in international commodity prices,thus affecting the China price level increases,Chinese downtown pressure on the economy under the new normal,input effect on the price volatility of commodities,especially at this stage of the collapse in commodity prices Chinese economy and the volatility of the price level is how to bring the impact is worth studying.This paper examines the correlation between the fluctuation of international commodity prices and the price level in China,especially the anticipation and transmission of the former to the latter.Based on the status of domestic price level changes caused in summarizing the domestic and foreign about commodity prices conduction effect on the status quo and the commodity,a detailed analysis of the international commodity price fluctuations affect the conduction mechanism of the price level in China,including the theoretical foundation,the conduction and conduction path.The selection of the latest commodity futures price index,CRB index,the consumer price index PPI,the producer price index PPI and money supply M2 for empirical research,analysis of correlation between the volatility of commodity prices and China's price level changes.This paper uses EVIEWS software to conduct empirical research,select the variable data during the period from January 2009 to June 2016 and the data will be divided into two stages,namely the international commodity prices and internationalcommodity decline stage,analysis of the correlation between the variables first,either rise or decline phase,all variables have a significant correlation however,the correlation decreased lower than the rising phase of the stage.The application of vector autoregressive model(VAR),the data into the Johansen cointegration test,Granger causality test,impulse function and variance decomposition model to analyze the response,the test results show that the effect of falling commodity prices and the price level of our country stage by commodity is small,which shows that China's price level price rigidity it is not easy to rise,easy to fall.Finally,through the analysis of empirical results,that the international commodity prices,the prices of China rising price levels promoted obviously,but the decline in commodity prices,the volatility and correlation between China's price level decreases,indicating the decline phase China price is not easily affected by the international bulk the fall in commodity prices.The article thinks,the trend of the world economy at this stage is still not optimistic,will bring the risk of further deflation Chinese economy,Chinese still need to be wary of the risk;at the same time China should make rational use of commodities decline stage,reduce the cost of the commodity price dividend,the vigorous development of the domestic economy.