The Pass-through Effect of RMB Exchange Rate Movements on Chinese Domestic Prices—Analysis based on Time Serial Input-output Tables

This study assesses the extent to which the movements in exchange rate affect domestic prices in China via the input-output price model based on non-competitive time serial input-output tables(1995—2011). The major findings of this study are as follows: the exchange rate movements have only a moderate effect on domestic prices; the pass-through of RMB exchange rate to different departments prices is significantly different; the degree of exchange rate pass-through decreases along the price chain from upstream to downstream prices; RMB appreciation has limited effect on easing China's domestic inflation pressure; RMB exchange rate changes caused the domestic CPI increase by 1.09% in 2013.