The Influence Of International Oil Price Fluctuation On China's Price Level -Empirical Research Based On MSVAR Model

Nowadays,the economy of every country is developing rapidly.Therefore,in the process of economic development,countries' demand for oil is also gradually increasing.As far as our country is concerned,our oil output can not meet our current economic development.China's oil import dependence is still rising,which indicates that the international oil price fluctuations will have a greater impact on China's price level.Based on the above economic background,this paper studies the impact of international oil price changes on China's price level.At the beginning of this paper,the relevant international and domestic literature is introduced,and the relevant literature is sorted out in detail.Then we have a preliminary understanding of the current situation of oil price in China and its pricing mechanism,and analyze the impact of international oil price fluctuations on prices.Considering the periodicity of the international oil price and the complexity of the real economic situation,the fitting degree and precision of the linear model are questionable.Therefore,this paper selects markov region system transition model(MSVAR model)to divide economic fluctuations into two different states of high volatility and low volatility,and respectively studies the interaction between international oil price volatility and China's price level under two different volatility states.In this paper,the international oil price fluctuations to the empirical analysis of the influence of price level changes,the following main conclusions:(1)from the district two variables of system transition probability can be seen that after the balanced economy in our country,to keep the original state probability is higher,and it is difficult to change its current state,and there is an obvious imbalance and asymmetry.(2)the growth rate of international oil price and the rate of change of CPI maintain a relationship of change in the same direction under the high regional system,while the change rate in the opposite direction under the low regional system.In the case of high volatility,the correlation between the two will be higher,and the fluctuation range of CPI will be more dramatic.In the case of low economic fluctuation,although the two are in inverse relationship,their correlation is relatively weak compared with the high regional system,and the fluctuation range of CPI is relatively moderate.Therefore,when dealing with the international oil price risk,China should take the initiative to optimize the energy structure,adjust the oil pricing mechanism,strengthen the national oil reserves and improve the oil futures market.