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Technology for Education and Learning pp 89–94Cite as

Exchange Rate and Price: A Granger Causality Test of Consumer Price Index in China

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Part of the Advances in Intelligent Systems and Computing book series (AINSC,volume 136)

Abstract

The purpose of this study is to examine a causal relationship between changes in exchange rate and changes in price level measured by CPI (consumer price index) in China by applying Granger Causality test, in which three major trading partners of China are chosen: the United States representing North America, European Union representing Europe, and Japan representing Asia. The secondary data, collected from National Bureau of Statistics of China, are for the period of January 2005 to April 2011 that spans the present managed floating exchange-rate period. The results of this study show that there is the causal relationship from changes in exchange rate (US dollar and Japanese Yen to Chinese Yuan) to changes in consumer price index in China. However, there is no evidence showing the causal relationship from changes in consumer price index to changes in exchange rate.

Keywords

  • Exchange Rate
  • Price
  • CPI
  • Granger Causality Test

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Authors and Affiliations

  1. Martin de Tours, School of Management and Economics, Assumption University, Bangkok, Thailand

    Bing Zhu

Authors
  1. Bing Zhu
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Correspondence to Bing Zhu .

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Editors and Affiliations

  1. , School of Electronic Engineering, Wuhan Institute of Technology, Lvting yajing 10-3-102, Wuhan, 430079, China, People's Republic

    Honghua Tan

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Zhu, B. (2012). Exchange Rate and Price: A Granger Causality Test of Consumer Price Index in China. In: Tan, H. (eds) Technology for Education and Learning. Advances in Intelligent Systems and Computing, vol 136. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-27711-5_13

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  • DOI: https://doi.org/10.1007/978-3-642-27711-5_13

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-27710-8

  • Online ISBN: 978-3-642-27711-5

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