Bulk Raw Material Price Impacts, Imported Inflation and Regulatory PathBulk Raw Material Price Impacts, Imported Inflation and Regulatory Path

Abstract

Based on the actual price impact of international bulk raw materials, this paper simulates the influence of different control schemes on price level and imported inflation of the main downstream industrial prices through adopting the wage - price linkage mechanism, and separates the net effect of wage - price linkage on price: In view of different inflation targets, the corresponding price regulation scheme of critical point is proposed. The conclusion of this paper is that imported inflation is an important factor for China's inflation; When the one-time price impacts reach 50%, the cost coverage will increase the general price level by 8.66%, When the downstream price is completely controlled, the general price level will rise by only 3.3%; The linkage between wage and price increases the general price level by one percentage point, but it does not lead to a spiral explosion path between wage and price. For the imported inflation caused by price changes of international raw materials, controlling product prices of downstream industries is an effective way to control inflation.