Based on the more recently developed technique of out-of-sample tests for Granger causality ( McCracken,2007) ,this paper investigates systematically the exported and imported characteristics of Chinese inflation. We also employ the technique of rolling impulse response analysis ( Yang et al.,2006a) to investigate the role of China in international transmission of price and external imported feature of China’s inflation under different exchange rate regimes. We show that inflation in China exhibits external imported feature and China’s new exchange rate regime introduced in 2005 do not insulate the domestic price levels from foreign inflation shocks. Finally,we put forward to some advice to keep the price stability. 


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