The Research Of Influences The Fluctuation Of Asset Prices Has On Inflation

since the 21th century, China's stock market has fluctated largely and the sales price of real estate has soared year by year. In the recent year, the price level also continued to be high, so inflation expectations is being strengthened. In order to prevent serious asset price bubbles and stabilize prices, the government has issued a series of policy measures.With the continuous development of capital market, the asset structure of Chinese residents also continues to change. To seek higer returns,more and more people invest part of their money in the stock maket and real estate,instead of depositing all their mony in Banks. the proportion of securities and real estate in the total assets of residents is increasing. With the rapid development of the capital market and residents assets structure also changes, fluctuation of asset prices has a growing impact on the financial stability and economic healthy growth.Based on a massive literature research, the paper fouse on analyzing the impact asset prices have on the inflation by using theoretical and empirical analysis methods. First of all, through theoretical analysis, it finds out the pathways about how the fluctuations of asset prices affect inflation. Secondly, the paper simply analyzes why asset prices, particular the stock price and the estate price fluctuate so fierecely in the recent years. Thirdly, based on the quarterly datas from 1998 to 2010,the thesis establishs the VAR model about the real estate sales prices, stock prices, money supply, GDP and consumer price index to analyze dynamic relationship among them.Cointegration test shows there is long-term stable relationship among stock prices, real estate sales price index and inflation; impulse response function analysis and variance decomposition results show that when real estate sales prices and stock price growth rate after external shocks will have some influences on inflation, but the effect is limited and gradually weakened, and the impacts on inflation is different. Relative to the money supply and GDP growth, real estate sales prices and stock price fluctuations on the impact of inflation is less important. Granger causality test results show that in addition to the money supply and GDP, real estate sales price index and stock price fluctuations will also affect the level of inflation to some extent.Finally,according to China's actual condition conbined with the conclusions of theoretical analysis and empirical analysis, the paper comes up with related policy suggestions on how to prevent asset foam and inflation.