A Study On The Nature And The Effect Of The Residents Inflation Expectations

Inflation is one of the main content of the macroeconomics research has been very in-depth research of domestic and foreign inflation. Prospect theory will be expected to be introduced into the inflation study is of great significance to promote the further development of the theory of inflation. On the nature of inflation expectations, a profound analysis of the determinants of inflation expectations formation of China’s residents, the Government has targeted the implementation of macro-control, to manage inflation expectations have important theoretical and practical significance. This article intends to answer the following questions:How inflation expectations are measured? What Chinese residents inflation expectations the characteristics are? Which factors, the impact of these factors on inflation expectations is what happens? Foreign management of inflation expectations has a wealth of theoretical and practical experience, and management how to combine China’s reality, learn from these experiences to manage inflation in inflation expectations?Expected since as the economic operation of the endogenous variables, it is necessary to quantify the inflation expectations. Quantitative methods of inflation expectations at home and abroad, such as through a survey method to obtain the residents of future price expectation index, or by the Securities and nominal yield spreads for investors’expected rate of inflation, or inflation predicted values obtained through structural modeling. This paper survey method to quantify the inflation expectations of our residents.Most on inflation expectations in the literature a single impact factor of the expected inflation rate, this paper attempts related factors with the inflation rate is expected to conduct a comprehensive analysis and construct a VAR model to be tested.Abroad, the management of inflation expectations, but the most typical implementation of inflation targeting to stabilize inflation expectations. Implementation requires many prerequisite for inflation targeting, including the central bank to have a higher independence and reputation of the degree, have strong predictive ability of monetary policy transparency. Domestic scholars have proposed that China should adopt inflation targeting, but China is not yet meet the conditions for the implementation of the system, if the rush to adopt this system, once people have cast doubt on the willingness and ability of the central bank would undermine the effective implementation of monetary policy sex. China’s inflation expectations recommendations to improve the transparency of monetary policy, strengthen the communication with the public and try to implement a quasi-inflation targeting.The main conclusions drawn in this paper include:1.The inflation of our residents are expected to have some of the adaptive nature of the expected, residents will be based on the expected deviation in the past to modify their inflation expectations. Chinese residents inflation expectations are not fully rational, rational composition.2.The positive impact of the inflation rate would be expected inflation rate have a continuing positive impact is expected to have the characteristics of self-realization; the actual rate of inflation, producer price index, money supply growth and exchange rates of change in expected inflation is expected to have a greater impact on the rate.