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How to look at the current prices? Countries some people are given the following observations.
Prices from two aspects: the rising costs and increasing the amount of money. In an open economy, rising costs and increasing the money supply, both domestic factors, there are international factors. Current prices are in the domestic supply and demand changes in economic development, self-organizing mechanism of international transmission mechanism and the results of interaction.
The cost of inflation mechanism
The process of economic development, there is the impulse to prices, which result from the scarcity of resources, rising costs: raw materials and rising prices of production factors. If the cost of technological advances can ease the upward pressure on prices will be stabilized Gucci outlet and even decreased; otherwise, prices will inevitably rise.
China's food prices accounted for 34% of total CPI, the prices continued to rise quickly to become the dominant factor in rising prices. Food prices are mainly determined by supply and demand. China's industrialization process and the consumption upgrade, requires a lot of cereal, eggs and other poultry products as the production of intermediate or final consumer goods, but failed to keep up with supply. Pork, for example, the specialized breeding to play a relatively weak and difficult to scale; meat before 2006, low price and high feed prices due to market risk; preventive mechanisms and the lack of blue ear pig disease and other diseases caused by frequent natural hazards, Farmers rational choice "voting with their feet" (to give up pig), together with a cyclical pork production, resulting in the current tight supply of pork, the price is high. This is our lack of progress in agricultural technology, risk to resolve the inevitable result of weak mechanism.
Cereal food prices as raw materials, an important factor is the international
Rise oil prices. Oil prices rose to run in the "wheels" on the developed countries and in the process of industrialization in developing countries need to consume large amounts of energy are under pressure, bio-energy alternative to traditional energy sources become a trend. Bio-energy requires a lot of food, fuel tanks and the residents of the table are the result of competition for grain prices. Unless technological advances to digestion of this contradiction, or else the competition will continue. The current international food (futures Gucci outlet online) prices have an important impact on domestic prices. Cereal prices, instant noodles, milk, wine and other products prices is a natural market to respond. The demonstration effect of food prices will lead to related companies (even if the cost to digestion pressure) to raise prices.
Consumer prices, another important reason is that the prices of primary products, resource transmission. On the one hand, China's heavy-duty industrial. Real estate investment, excessive resource products has created an enormous demand; the other hand, distortion of resource products pricing, as the market improved, the pricing mechanism and gradually corrected, the inevitable price increases the release of the impulse. Thus, the upstream price increases, through conduction, will inevitably lead to lower prices.
Monetary mechanism of rising prices
The popular explanation is that inflation, too much money chasing too few goods. The current excess liquidity in China, mainly from three aspects Asics Shoes.
First, the income effect of economic growth. China's high economic growth, low inflation, the pattern has been maintained for many years, economic growth results in increased capacity to pay, will inevitably lead to the rise in prices to a certain extent, otherwise the producers can not benefit from economic growth caused by tight supply. The current price increases in recent years, more than 10% of continuous economic growth in the cumulative income effect of the normal release.
Second, the wealth effect of rising asset prices. Consumer upgrades generate the "live" in great demand, all kinds of speculation in real estate group and the demonstration effect, causing hot property market, accumulated some wealth effect. The continuing rapid increase in stock, changing the structure of the income, property income has risen. The wealth effect of asset prices will be accumulated to a certain extent, the release of consumer prices.
Third, foreign capital inflows associated with non-normal effects. Since 2003,
RMB appreciation is expected to lead to international hot money in various ways (such as a false trade) into China, the typical performance is abnormal growth of foreign exchange reserves, these funds is to seek property and stock markets and currency markets win, mainly chasing asset prices. However, these funds will have associated effects, such as the wealth effect, demonstration effect, effect of liberal investment funds, after a certain cumulative release for the commodity prices. And, when asset prices high enough prices, some of the hot money will return to hedge commodity markets, causing prices to rise.
The face of domestic and international factors and monetary costs of the combined effects of inflation, policymakers need to rationalize the allocation of the price effect. Overseas to curb excess liquidity factors, to prevent excessive loss of earnings inflation, monetary policy is much needed attention. For the supply and demand due to price increases, except in emergency situations (such as SARS, disaster), the Government should not over-intervention, but should be taken to production subsidies or consumption subsidies ways to make multi-party commitment and resolve the price risk.
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