| The consumer price index (CPI) and producer price index (PPI) are measures of the main indicators of price changes. Price stability as one of the four objectives of the macro-control of the economy has a crucial importance. Research on the conducting relations between CPI and PPI is of great theoretical and practical significance to grasping the price law,improving macroecnomic regulation and achieving price stability.The connotation, measurement and correlation of CPI and PPI were analyzed in this paper. It was found that CPI and PPI have shown a correlation whether using annual data or monthly data.Then,based on the monthly data of CPI and PPI, an empirical study on the transmission mechanism between CPI and PPI was carried out in the period from December 2015 to January 2000, using dynamic Grainger causality test method.The empirical results showed that:The first, the Granger causality of the reverse transfer from CPI to PPI was significantly higher than the forward conduction from PPI to CPI, and the forward conduction was relatively backward compared to the reverse conduction. The second, from january 2001 to may 2003,the factors affecting the forward conduction were mining class, raw materials and processing of industrial producer price index of production; after april 2009, the food price index was the factor affecting the forward conduction primarily, whether in the period from december 2002 to october 2003, or in th period from november 2007 to december 2015, The factor affecting the reverse conduction from CPI to PPI was food consumer price index. |
