Date of Award

2010

Degree Type

Thesis

Degree Name

Bachelor of Business Honours

School

School of Business

Faculty

Faculty of Business and Law

First Advisor

Zhaoyong Zhang

Abstract

The present study sets up an empirical framework to study the exchange rate pass through (ERPT) issue in China's domestic markets, within the Chinese economic reform period from 1978 till present. The results show a relative low degree of pass-through to consumer and retail prices, but high degree of pass-through to producer and purchasing prices. It suggests that the degree of ERPT tends to diminish along the price chain. In addition, the results also show an increasing trend of the degree of ERPT in recent years. The speed of price reaction to exchange rate shocks may be quicker in recent years as well. Overall, this study reveals a relatively complete picture of the ERPT in China's domestic markets.

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