The Effective Inflation Driving Factors In China, Nonlinear Characteristics And Integrated Control Policies

Inflation is key element of whether the national economy will have a harmonious and healthy development,the effective implementation of monetary policy,and an important reference indicators of regulation and control of macro finance and economic policy.In recent years,with the continuous changes of the domestic and international economic and financial situation,there is a significant change in the peak and valley volatility of inflation.In 2007,domestic prices rose significantly,the CPI index to measure the level of inflation continued to rise.In 2008,the growth of economic has slowed down due to the global financial crisis triggered by the U.S.subprime mortgage crisis,CPI began to show a downward trend,but also a negative.And since the end of 2009 to 2010,China took the strong economic stimulus background in response to the global financial crisis,CPI rebounded to about 3.3%,and in 2011 climbed to 4.9%.However,CPI has gone through the bottom in 2012,showing the trend of entering the rising channel.Although the trend of inflation has frequently occurred in the past 20 years,in recent years it shows a clear overall downward trend,and the volatility has become more stable.This trend reveals a series of important questions:whether the inflation in dynamic path of China has undergone significant structural changes over the past period of time?Moreover,in the perspective of the global economy,China's monetary policy is subject to the complex and volatile economic situation at home and abroad,facing many constraints,whether deep-seated drivers lead to triggering structural changes in inflation are existent?Through the analysis of the trend of China's inflation rate from 2000.1 to 2016.111,we can also see that China's inflation rate is nonlinear.So how to describe the nonlinear characteristics of inflation in China?Based on the new Keynes Phillips curve and hybrid Phillips curve,constructed expansion of the Phillips curve,including the consumption investment and net export gap,in:flation expectations and inflation inertia driving factors,and using the quarterly economic data from 2000.? to 2016.?,based on analysis measurement and empirical test of GMM method which relied on China's effective drive factor extended Phillips curve,in order to identify the drivers of inflation in china.Further,in order to use consumption gap and investment gap inflation belongs to effectively drive factors as the threshold variable,this paper establishes the nonlinear extended Phillips curve based on mechanism of double variable logic smooth transfer,based on the NLS method,analyze the optimal threshold of consumption gap and the investment gap in China,the transfer speed and the nonlinear characteristics of our country's inflation,and high area system and low area system under the optimal threshold combination.In addition to the introduction and conclusion as well as policy proposal,the paper is divided into 4 chapters:The second chapter,starts from three aspects,above the perspective of inflation,inflation expectations,the Phillips curve,combing related factors of the development of inflation and its expectations.Inflation is an economic phenomenon which can not be got beyond in the process of economic development.It has experienced two historical stages,the currency and the price rise.Inflation expectations have experienced the evolution of adaptive expectations,rational expectations and mixed expectations,and the measurement methods include statistical investigation,financial market extraction,econometric modeling and so on.The Phillips curve theory has experienced the evolution of traditional Phillips curve,Keynes's new Keynes Phillips curve,Phillips curve,Phillips curve,nonlinear hybrid Phillips curve.The third chapter analyzes the internal and external driving factors of inflation in China.The internal driving factors including consumer demand,investment demand,fiscal deficits,asset prices,excess liquidity,excess production capacity and market competition,the external driving factors including exchange rate,import and export trade,international capital flows,trade openness and commodity prices.The fourth chapter,on the basis of the new Keynes Phillips curve and hybrid Phillips curve,constructed a expansion of the Phillips curve,including the consumption gap,investment gap and net export gap,inflation expectations and inflation inertia and other driving factors,and using the quarterly economic data from2000.? to 2016.?,based on analysis measurement and empirical test of GMM method which relied on China's effective drive factor extended Phillips curve,in order to identify the effective driving factors of inflation in China.The GMM analysis based on the effective driving factors of the extended Phillips curve showed that;consumption gap and investment gap constitute effective driving factors of inflation in China,but the investment gap on inflation effectively driving is more sensitive to the inflation index at the same time,the driving effectiveness of the investment gap and consumption gap on inflation have no consistent conclusion.The change of net export gap has little effect on China's inflation,and the net export gap does not constitute the effective driving factor of inflation in China.Inflation expectations and inflation inertia constitute the effective driving factors of inflation in China,and the effect of inflation inertia on inflation is stronger than that of inflation expectation.The fifth chapter establishes the nonlinear extended Phillips curve base on double variable logic smooth transfer mechanism,based on the NLS method 5 analyze the optimal threshold of consumption gap and the investment gap in China,the transfer speed and the nonlinear characteristics of our country's inflation,and high area system and low area system under the optimal threshold combination.The empirical analysis of NLS based on the nonlinear extended Phillips curve under the double variable logic smooth transfer mechanism showed that:if our nonlinear extended Phillips curve is in the low mechanism,then the gap of China's consumption threshold range of[-4.99%,-0.14%]as well as the investment gap is greater than 3.25%.When the Phillips curve is in high expansion mechanism,The coefficient of inflation expectations and inflation inertia is respectively two times as much as the low mechanism,In the nonlinear changes of inflation,changes in consumption gap and investment gap have more asymmetric impacts of inflation through coefficient of inflation expectations and inflation inertia.