Energy Strategy Reviews (Mar 2024)
Forecasting the delayed impact of energy price fluctuations on China's general prices based on a temporal input-output approach
Abstract
The Chinese economy is facing the impact of soaring energy prices, including the prices of coal, electricity and oil. The impacts of energy price fluctuations on general prices have a significant delayed effect. A novel price-temporal input-output (I–O) method is proposed to measure these delayed effects. A series of time-delay functions caused by a single price fluctuation and continuous price fluctuations is obtained through polynomial fitting. Then, the impact of price regulation and price delay adjustment on the delayed effect is further examined. Finally, China's latest 2017 I–O table, 4186 listed companies, and actual oil price adjustment data for 2020 are used to conduct empirical research. The delayed effect of oil, coal, electricity and gas price fluctuations on general prices and price indices, such as the consumer price index (CPI) and producer price index (PPI), are comprehensively investigated, and a corresponding time-delay ratio table for rapid querying is provided. The results indicate that the delayed impact of energy price fluctuations on the prices of various sectors lasts for half a year or even longer; additionally, these effects are very different. Logistics prices and the PPI are the most affected by oil price fluctuations, while trade prices and the CPI are the least affected by oil price fluctuations. China's oil price adjustments in 2020 led to a decline in general prices, and prices rebounded at the end of the year. Price regulation, especially electricity price regulation, reduces the impact of energy price fluctuations on general prices, and price delay adjustments extend the length of the time delay. This study can help improve how governments and enterprises address the impact of energy price fluctuations.
