Research On Impact Of External Factors On Recent Round Of Inflation Circle(2003-2007) In China

When the pace of economic globalization speeds up,Interaational economy has more and more influence on that of China's.So we can not ignore the external factors when analyzing what factors impact China's inflation.This thesis discusses the impact of external factors on China's recent round of inflation cycle(From 2003 to 2007) and what measures should we take to deal with such impacts.The thesis uses theoretic as well as quantitative methods to reach convincing conclusions.This thesis consists of five parts.The first part is preface, which centers on the review of research on such a topic before and what research methods are taken in the thesis; The second part consists a general analysis of the impacts of external factors on the current round of inflation in China through contrast to past several rounds of inflation cycles in China.;The third part uses quantitative methods to verify the analysis above,mainly using the VAR model and Variance Decomposition technique; The fourth part gives some suggestions to deal with external shocks on China's inflation, including estalishing long-term strategic policy of energy and grain reserve,taking more flexible monetary policy, enforcing the control of foreign capital inflow and accelerating the adjustment in China's economic structure in order to stabilize fluctuations in inflation, which is good to the whole economy.The fifth part analyzes that we might face deflation risk now and what measures should we take to cope with such a risk.