Research an the Impact of US Monetary Policy Uncertainty on China's CPI
In response to the domestic economic downturn and high inflation that began in 2018 in the United States,the Federal Reserve implemented a monetary policy from loose to tight.Since the US dollar has a dominant position in the international clearing system(SWIFT)and has an absolute share in the SDR currency basket,the uncertainty of the US monetary policy"loose and tight"adjustments may bring risks to the world and the Chinese economy.Based on international currency,price transmission and other theories,this paper selects the time series data of US interest rates and China's CPI from January 2019 to June 2023,and uses the TVP-VAR model to study the external shock effect of US monetary policy adjustment on China's CPI.The study shows that the uncertainty of the US monetary policy adjustment from loose to tight has an external impact on China's CPI and has a time-varying feature;at different times of"loose and tight",the US monetary policy has different impacts on China's CPI through different channels;at the same time,the Fed's monetary policy adjustment has a heterogeneous impact on the prices of different commodities in China.Therefore,China needs to continue to adhere to a prudent monetary policy,fully play the dual functions of monetary policy tools in terms of quantity and structure;use good international and domestic financial resources,markets and other financial elements,and continuously improve the level of financial opening;and steadily advance the construction of a financial powerhouse.Prioritize domestic circulation,enhance economic drive and resilience of industries,and lay a solid foundation for CPI in China to fluctuate within a reasonable range with profound"internal strength".Strengthen monitoring and regulation of energy,consumer goods,and daily necessities,which have a significant impact on CPI,to reduce the external risks of abnormal fluctuations in CPI caused by the uncertainty of US monetary policy adjustments and support the construction of a financial powerhouse in China.
US monetary policyChina's CPITVP-VAR modelHeterogeneity analysis
万方数据
维普
