| Abstract | This paper studies the nonlinear regime switch characteristic of transmission channel of international factors to inflation by extending Gamber,Hung’s (2001) research frame. Based on this, we build data set of inflation factors and use nonlinear dynamic factor model to reveal the nonlinear transmission effects of international factors to inflation. The results show that international factor effect inflation through trade and capital channels. The transmission effects can be divided into common transmission effects and idiosyncratic transmission effects. Those transmission effects have nonlinear characteristic. With the economic restructuring of stimulating domestic demand slowly, the transmission effect of international factors to Chinese inflation will be weakened.All international factors can be synthesized six common factors. Currently, the international cost factor, international energy factor, international monetary factor and foreign trade factor have negative nonlinear transmission effects to inflation and the international cost factor and international energy factor have larger negative transmission effect than the others. The exiting of quantitative easing monetary policy of U.S.A, the rising of dollar index, the decline of raw material prices and energy prices of international will have negative nonlinear idiosyncratic transmission effect. On the whole, international factors have inhibitory effects to inflation. |