RMB Exchange Rate Pass-through from a Perspective of Inflationary Environment:Theoretical Model and Empirical Study

Based on the theoretical model of exchange rate pass-through raised by Shintani et al in 2009,the paper explains the impact of inflationary environment on exchange rate pass-through,develops the model and proves the non-linear and smooth change of the impact of exchange rate pass-through on consumer prices comprehensively.Then,it makes an empirical analysis by using STR model and the results show as follows:firstly,while the inflationary environment is lower and more stable,the exchange rate pass-through is lower,and while the inflationary environment is higher and less stable,the exchange rate pass-through is higher;secondly,with changes of the inflationary environment,it varies from-0.136 to-0.049 smoothly and nonlinearly,which means there is a relatively large change in exchange rate pass-through,so we should pay attention to the impact of the inflationary environment on exchange rate pass-through.