Analysis Of Price Transmission Between Food And Non-food

The measuring gap between food and non-food inflation rate continuallywidened. This phenomenon has caused wide attention. In the contest of thepaper,we use food and non-food inflation rate as the reaseach object to studythe transmission relationships between them. This article mainly as follows:First, let CPI divided into food an non-food. Because food accounts foras much as a third weight, therefore, we call this non-food. The CPIeliminate food we generally call it non-food. This can avoid the trifles toanalysis all iterms in CPI, so it can be more clearly to study the transmissionrules between them.Second, we use the recent development of asymmetric BEKK-GARCHmodel to examine the short-term volatility spillover effct between food andnon-food price. The expirical results show that existing food price to non-foodprice. Another, the emergency from the field of non-food will make foodsupply shortages. This can boost food prices go up. Therefore, thegovernment should be alert the emergency from the field of non-food.Third, using ARMA model analysis the inertia of food and non-foodinflation. The results show that food prices and non-food prices have highinertia inflation. We proposed that the government should concern theinflation. At the same time, they need to focus on food price inflation andnon-food price inflation, so we should be based on the food prices inflationand its dynamic behavior to adjustment the monetrary policy moderately.Finally, this paper analysis the full text and the empirical research. Itproposed mainly suggestions that policy makers should stabilize price.