Identification of inflation transmission mechanism and the classified governance of inflation
Based on the time-varying Granger causality test,this paper identifies the transmission mechanism as well as the cost burden of inflation in China's previous typical inflation periods.Then using a counterfactual simulation,we further give an optimal governance strategy for structural inflation.The conclusions are as follows:First,the inflation before 2012 is basically global,while after 2012,inflation has typical structural characteristics.Second,the central bank just needs to target the source of inflation and the terminal of cost when curbing global inflation.As for the structural inflation,the policy authority should pay more attention to get through the inflation transmission chain.Third,this round of deflation is a typical global deflation caused by insufficient demand.However,considering only the reverse price transmission chain is smooth in this round of deflation,it is still possible for the deflation turning to a structural one.Fourth,facing with structural inflation,the central bank should properly target the production price index,which may not only help to eliminate the potential inflation risk in advance,but also create a beneficial macro environment and growth space for the economic recovery in the post-epidemic period.
transmission mechanism of inflationtime-varying Granger causality testclassified governance of inflationcounterfactual simulation
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