Abstract:
The crude oil pricing mechanism of China has been realizing marketization progressively. The relevance between the oil prices at home and abroad gets greatly strengthened. The main purpose of this paper is to investigate the transmission process of international oil price fluctuations to the domestic consumer price level. Within the sample range between January 2007 and December 2015,this paper starts from the transmission mechanism of international oil price to CPI,which is divided into direct and indirect transduction channels by conductive property. We conduct our analysis under two separate cases:direct transduction channel,and indirect transduction channel. On the basis of co-integration and asymmetric price transmission-error correlation model (APT-ECM),the transmission process and properties are explored deeply combining with Wald test and impulse response function analysis methods. The quantitative results mainly shows that the transmission of international oil price fluctuations to the domestic consumer price level includes vertical conduction and space conduction.Owing to the varied shocksto transmission process,it has asymmetric performances to various certain extents in the direction,range and conduction pace of oil price fluctuations.