Research On The Inverted "U" Curve Effect Of Market-Oriented Reforms On Price Fluctuations In China

Over the past three more decades since the reform and opening up,China has created a miracle of economic growth in the world,but also experienced dramatic price fluctuations,resulting in a certain social welfare loss.Market-oriented reform is the direction that China's economic transformation must adhere to,and the 18th CPC National Congress and the third Plenary Session of the 18th CPC Central Committee proposed to deepen the reform,to build a complete,scientific and effective system.Over the past more than 30 years,the oriented-reforms of China have a significant impact on China's price fluctuations.Therefore,it is necessary to study the relationship between them.Scholars both home and abroad have researched price fluctuations thoroughly,and gave a more profound analysis of the impact of market reforms on price fluctuations.Meanwhile,the paper also discussed the relationship between the market-oriented reform and the price fluctuation in China,and explained the mechanism of the influence of market-oriented reforms on the price fluctuation.However,there is no real quantitative analysis of the relationship between them.This paper,combining theoretical research and empirical research,tries to study the impact of market-oriented reforms on price volatility comprehensively,objectively and profoundly.First of all,this paper simply explains the meaning of "inverted" U"effect" and "market-oriented reforms",secondly we deeply elaborate the intrinsic mechanism of the impact of market-oriented reforms on price fluctuations by the following aspects:the conversion of the price model,agricultural products "price-price spiral" mechanism,the micro subject "interests of self-soft binding competition" mechanism and the macroeconomic management level.Then,by measuring the degree of marketization and the price fluctuation,the history and current situation of market reforms and price fluctuations in China are described briefly.Again we use the data from China's 30 provinces,cities and regions during 1978-2014 to test this impact,the conclusion of which indicates that the effect of market reforms on price fluctuations showed an inverted "U" curve through the conversion of the price model,agricultural products "price-price spiral" mechanism,the micro subject "interests of self-soft binding competition" mechanism and the macroeconomic management level,namely the market reform will aggravate the price fluctuation when the degree of market is low,and when the market degree reaches a critical value,the market reforms will slow down the price fluctuation and The turning point is around 1993.Moreover,the inverted "U" type effect of price model conversion is more obvious,while the "U" effect of macroeconomic management is not obvious.Finally,based on the theoretical and empirical analysis,we put forward some policy recommendations as follows:Market oriented-reform has not yet completed in our country,so we still need to keep prices steady in the deepening of reforms,that is,we should push forward actively and steadily the market-oriented reform,accelerate the reform of the generalized price system,promote the reform of agricultural supply side,continue to deepen the reform of state-owned enterprises,and improve the level of macroeconomic management.