What's behind volatile import prices from China?

Amiti, Mary; Davis, Donald R.

Journal Article

What's behind volatile import prices from China?

Abstract: In a sharp departure from earlier trends, the price of U.S. imports from China rose 6 percent in the 2006-08 period. To explore the forces behind this surprising increase, the authors create a new import index that uses highly disaggregated data to track price developments in different product types. The index reveals that the largest price increases were concentrated in industrial supplies - goods that rely heavily on commodity inputs. The authors conclude that the surge in commodity prices through mid-2008 was the primary driver of the rising import prices from China.

Keywords: Price indexes; Imports - Prices; Petroleum industry and trade; Commodity exchanges;