Based On System Dynamics Of Chinese Inflation Formation Mechanism Research

Inflation is the world widespread economic phenomenon, but also an effect on ourcountry’s economic operation. Price stability and control inflation is a national macrocontrol objectives. The traditional inflation formation mechanism have needs, cost aboutthe type, imported inflation, etc. As the global economic integration, the impact ofeconomic operation of the factors and the relationship between these factors is morecomplex, especially of various factors on the effect of inflation. The traditional economicstheory is unable to fully describe. System dynamics gradually become the foremost field ofcontemporary economic research.In this paper, the system dynamics model, from the point of view of system of effecton our country’s inflation internal root cause analysis. Inflation system is put forward byeconomic development subsystem, loan subsystem, financial revenue and expendituresubsystem, and international balance of payments subsystem a complex multiple feedbacksystem. By system dynamics Vensim software, based on inflation causal feedback system,so as to reveal the influence model is the main factor of inflation. Through theestablishment of inflation system structure flow chart and equation, the inflation fordynamic system, adjust the quantitative analysis of the related parameters of the simulationand forecast, and based on this, puts forward relevant policy suggestions.Full text is divided into five chapters. The first chapter for introduction, this paperexpounds the full text to choose a background and meaning, the retrospective summary ofdomestic and foreign scholars inflation research results. This paper introduces the researchmethod, the main contents and innovative points. The second chapter presents the basicprinciple of the system dynamics, and the analysis of the system dynamics researchinflation of necessity and feasibility. Chapter3construct inflation causal feedback systemmodel. Chapter4inflation system dynamic model of steps and testing procedures, finallyusing the simulation results to make predictions. Chapter5put forward in view of China’sinflation to the actual conditions of the policy Suggestions, so that our country’s economichealth of smooth development.