China’s Current Inflation Research

In the modern economic and social life, the impact of inflation on the public isnot an unfamiliar economic terms. In particular, the current inflation situation inChina’s increasingly serious inflation on economic and social sphere of influence is sogreat, so deep extent, tend to make people talking crazy, so it is their personalexperience. This paper attempts to identify the causes of inflation and governancecountermeasures.This article is divided into four parts.The first part is a basic understanding of inflation, that is, what is the measure ofinflation, the classification of the extent of inflation and inflation.The second part is to resolve the current status quo of China’s inflation and itssignificant impact on the national economy. China’s economy experienced ashort-term prosperity in2009-2010, the consequences of inflationary policies isgradually obvious.2011, China’s CPI and PPI continue to rise, the inflation situationis becoming increasingly grim: prices continued to rise, increasing pressure of living;volatile economic environment, deteriorating business environment; risingunemployment; the national economy slowdown. This suggests that the inflationarypolicy of credit expansion is difficult to make the prosperity of the national economy,would bring the economy into recession, even depression.The third part is the analysis of the causes of inflation. Inflation is essentially amonetary phenomenon, the fundamental reason is the rising prices and thedevaluation of the money supply than the economy of the actual requirements. Thesame time, the significant increase of money supply, the rapid expansion of China’sinvestment scale and the rapid expansion of aggregate demand and a surge in demandof the economy for money, thus creating a vicious cycle, resulting in the currencymore more. In addition, the imported inflation exacerbated by China’s inflation.The fourth part of the healing measures of inflation developed on the basis of thecauses of inflation. The root causes of inflation because of the ultra-economic issue ofthe currency, caused by excessive money supply incentives are many and varied, andtherefore, according to the causes of inflation, and take various measures in acomprehensive way. Healing countermeasures: the tightening of monetary and fiscal policies; to increase effective supply; balance of international payments, and so on. Atthe same time, the control of inflation requires a long process, and make the economicslowdown and rising unemployment, the government must insist on theimplementation of medical treatment countermeasures, must not give up halfway.