Research On Price Fluctuation And Forecast Of Shandong Province

As an important macroscopic economic indicator, the price has the inseparable relation with the macroscopic economic movement. It is an "indicator" of the market economy to reflect the hot and cold, it is also the "regulator" of market economic resources allocation. It is a reflection of the substantive issues of the entire macro-economy.Since reform and opening up, China has experienced relatively few serious fluctuations in prices. The new round of price increases from the beginning of 2007 have many differences from previous in both the institutional environment, economic openness, or the total supply and demand pattern and so on all. This round of price increases are more complex, both cost-pushing and demand- driving, both domestic and imported reasons, it is caused by the superposition of a number of factors, the extent of its influence is further and deeper, it has been deeply affected People's daily lives.As a major economic province of China, Shandong Province's economic development and people's lives are closely linked to fluctuations in the price level, therefore, it is necessary to fit and forecast Shandong's price fluctuations, so we can provide early warning and macro-control for the economy. The Consumer Price Index (CPI), is a reflection of the relative movement of the trends and extent of the price of consumer goods and services bought by urban and rural residents in a certain period of time. CPI is widely used as an important indicator of the extent of inflation (or deflation), its change can reflect the trend of fluctuations in commodity prices objectively, it is difficult for other economic indicators to replace it,so, it is of great importance to study the CPI.In the above background, the paper combines the reality of China and Shandong Province, despitely use seasonal ARJMA and Auto-Regressive models to research and forecast Shandong Province's monthly CPI from January 1996 to December 2007. Before the Auto-Regressive model, this paper uses X-12-ARIMA model to proceed a seasonally adjust in Shandong Province's CPI, and uses TRAMO/SEATS model to test the effects of the Spring Festival in Shandong Province's CPI, and gets the adjusted trend and seasonal effects T and S. This article also measures inflation rate of Shandong Province on the basis of the fitting and forecasting in the CPI sequence, both the two models show that Shandong Province is facing moderate inflation, the province is facing a certain degree of inflationary pressures. Finally, this paper draws conclusions and provides policy recommendations.This article is divided into six chapters totally. The first chapter explained the significance of the topic, reviewed the literature of the scholars at home and abroad, introduced the content of this article and the major innovation and lack. The second chapter studies the price fluctuations theories, recalls major theories and characteristics of the fluctuations of the price. The third chapter described the main concepts and related methods in this article. The fourth chapter used the seasonal ARIMA model to fit and forecast in Shandong Province monthly price index data. Chapter V firstly used X-12-ARIMA seasonal adjustment method to adjust Shandong Province's Price Index sequence, then used TRAMO /SEATS model to deal with the effects of spring festival, and finally used Auto-Regressive model to fit and forecast in the price index of Shandong Province. Chapter VI gives the comparison between the two models and conclusions and policy recommendations.