Inflation Backdropof Expanding Domestic Demandpathstudy

With the continuous development of economic globalization and large-scale outbreak of the financial crisis, inflation has become the common difficulties faced by the vast majority of countries in the world. In China’s economy continues to grow at the same time, the inflation problem is worsening, the face of rising prices, the pressure has become a primary task of macroeconomic regulation and control of the country in recent years to curb inflation. Since the reform and opening up, along with30years of rapid economic growth, China has four times of high inflation, repeated bouts of high inflation for the first time to achieve a soft landing of the economy, has accumulated valuable experience to deal with inflation. It is anticipated that in the process of curbing inflation, deflation situation. A large range of prolonged deflation but inhibit the pace of economic growth. Inflation is ultimately a product of the total supply and total social demand imbalance. Inflation is always a monetary phenomenon, is the inevitable product of the monetary economy. At present, China implemented a "proactive fiscal policy and prudent monetary policy" visible monetary policy step by step from "loose" to "prudent", it shows the government’s macro-control "control inflation" determination.Under normal circumstances, the price increases show that domestic demand is greater than supply, that demand and insufficient supply. But the basic form of the coexistence of insufficient domestic demand and inflation, and thus play a serious impediment to the effectiveness of macro-control, to macroeconomic regulation caused difficulties. Inflation is not conducive to economic and social stability, and insufficient domestic demand is a serious impediment to economic growth momentum. Expanding domestic demand is a basic state policy of China’s "Twelfth Five-Year" period even longer historical period, the transformation of China’s economic growth mode and achieve sustainable economic and social development in the process of expanding domestic demand without fueling inflation, at the same time in the process of controlling inflation does not affect the expansion of domestic demand is one of our problems to be solved. It can be said that inflation control is the primary task of China’s macroeconomic control and expand domestic demand is the transformation of economic growth mode to achieve long-term basic national policy of sustainable economic growth, the basic requirements of the scientific development concept, the relationship between the two must co-ordinate, in opposition to grasp the unity of the two, and thus need to keep inflation controlled control policies to expand domestic demand, the introduction of a new viable path selection.Fundamentally speaking, the most prominent of the principal contradiction in the economic life of our country is the lack of aggregate demand, then the expansion of domestic demand has become a core task of macroeconomic regulation and control. Fiscal policy and monetary policy as the two pillars of China’s macroeconomic policies, their common goal is to present a wide range of trends, we need to constantly weigh and choose between "anti-inflation" and "expanding domestic demand" to promote stable and healthy development of China’s sustained economic.Investment demand, consumer demand and export demand is driving China’s economic growth,"Troika", but in China’s macroeconomic development, there is always an urgent problem that is serious "Troika" shares Rallyuneven. China’s rapid economic growth has long been mainly relying on investment and exports driven by the lack of effective consumer demand has been a problem affecting China’s economic development. In domestic demand has not improved, constantly rising CPI will make residents had already high cost of living is becoming increasingly higher, then the traditional Keynesian macro-control policy is inflation.In terms of the relationship between inflation and consumer demand, an important aspect of the traditional money supply affects inflation is just inflation on the one hand, the volume and structure of consumer demand also changes in inflation. Study the structure of the inflation and consumer demand in the empirical context of inflation is also of great practical significance, not only conducive to the intrinsic link between the deeper excavations both better guidance on how to expand domestic demand, optimizing domestic demand structure is necessary. Therefore, documents and Cointegration paper uses econometric methods, reasonable to select multiple variables, the use of empirical methods to explore the relationship of the structure of consumer demand and inflation, and that government consumption between urban and rural residents’ consumption and inflation quantitative measure of the long-run equilibrium relationship, as well as the equilibrium relationship exists, is to provide a theoretical basis and empirical support in the context of inflation to stimulate consumption and expand domestic demand.This paper is divided into five parts, the first part introduces the research background, research purpose and significance as well as the relevant research results at home and abroad, for the subsequent content to provide sufficient theory basis; the second part introduces the inflation, consumer demand and investment demand of the related concept and the current situation of our country; the third part analyses the cause of the insufficient demand of China direct and root causes; the fourth part introduces the other representative countries in expanding domestic demand on the method and Their Enlightenment to China; the fifth part of the combination of the above analysis, for China to keep inflation under control under the premise of expanding domestic demand put forward corresponding opinion and proposal.