Exchange Rate Pass-Through: The Case of China

Jinbin Wang () and Nan Li ()
Additional contact information
Jinbin Wang: School of Economics, Renmin University of China, Beijing 100872, China
Nan Li: School of Economics, Renmin University of China, Beijing 100872, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2010, vol. 5, issue 3, 356-374

Abstract: This paper studies the degree of the exchange rate pass-through (ERPT) to import and consumer prices in China with both the ratio of China’s imports to GDP and domestic prices of China’s main trade partners going up. Statistic results show that the degree of ERPT is somehow less than the degree of marginal cost plus mark-up pass-through of exporters, and econometric analyses reach the same conclusion. Besides, the ERPT to import prices is found to be high while the ERPT to CPI is low owing to some factors that obstruct the import prices pass-through channel to domestic CPI. But this situation has been changing significantly since August 2005. Thus, a more flexible exchange rate system is needed for China to absorb the price shock from aboard efficiently.

Keywords: exchange rate pass-through; cost mark-up; CPI (search for similar items in EconPapers)
JEL-codes: F41 G12 G31 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.1007/s11459-010-0102-4 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:5:y:2010:i:3:p:356-374

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().