A Study On The Mechanism And Effects Of Pass-through From RMB Exchange Rate To Price

Exchange rate shake has Pass.Based on summation on relevant theories,using data from January 2001to November 2008,this Paper focuses on empirically study the effete of RMB exchange rate movement on domestic Prices.Through effect on imported and exported Prices.We investigate the transmission between exchange rate and import price and then domestic prices.We employ Johansen and Juselius' co-integration to test the long- run relationship between exchange rates and prices.By utilizing HP filter,we derive the short term series of exchange rate and prices,and analyze their dynamic relationship with impulse response and variance decompositions.It is found that the response of IPI to exchange rate violability is very sensitive,while the response of PPI is incomplete though quick.The response of CPI is the weakest and lagging.At last presents a Summation On Previous empirical results and recommends reliable explanations based on relevant theories and status quo in China.Relevant Political implications are proposed toward those empirical conclusions.