Abstract This paper makes a quantitative analysis on the relation between financial factors and grain price volatility with VEC model and EARCH model. It is found that there are different pathways in the short-term and long-term among the exchange rate, money supply M2 and foreign exchange reserves.According to risk analysis, the most significant element is exchange rate among the exchange rate, money supply M2 and foreign exchange reserves. At the same time, the information impact curve shows that financial factors have asymmetric effect to increase the volatility of grain price.
2013, Vol. 1 
