Quantitative Research On The Nominal And Real Factors Affecting The Price Fluctuation In China

Based on the theory of Keynes and the monetary, we divided the currency,demand pull and cost push, wage-price spiral into two categories: nominal and actualfactors. Among them, the actual factors (or economic prosperity) refers to the demand,and this paper measured by output; Nominal factor refers to the monetary cost(including wages), and this paper measured by the money supply, meanwhile，we dosome empirical research on the two factors of monetary and output.We established one VAR model of money, output and price, and explored theimpulse response and variance decomposition among them, and concluded that thethree factors have some degree of interaction effects. For impulse response, When wegive the money supply growth rate and the output growth a positive impact, theinflation rate are increasing in the short term as response; When we give the moneysupply growth rate and inflation rate a positive impact, the growth rate of outputincreased firstly, but then decreased; When we give the output growth rate andinflation rate a positive impact, the money supply growth rate reduced at first andthen increased. For the variance decomposition, the money supply growth rate and theoutput growth rate all keep the same contribution rate to the rate of inflation, and havethe same movements; The contribution of the output growth rate to money supplygrowth rate is small but relatively stable, and the contribution of inflation to thegrowth rate of money supply is larger than the contribution of output growth rate;Through the variance decomposition of the output growth rate, the contribution of therate of money supply’s to the output is small but relatively stable, the contribution ofthe rate of inflation to the growth rate of output is stable in the former stage3.Afterthat, the contribution gradually increased and kept stable in the seventh period. It also shows that some certain degree of inflation can stimulate the increase of output in theeconomic society. At the same time, according increasing the money supply simply toaffect the influence degree of the output is limited.We make further elaboration on the nominal factors affecting commodity price,we respectively analyzes the correlation of the growth rate of money supply,monetary cashability, monetization degree, the money velocity and the rate ofinflation. Further more, we use the rolling method to depict the dynamic correlationbetween them in more detail. Then we establish the state space model to analysis theirimpact on the price fluctuation of time-varying. We concluded that in addition to themonetary circulation speed on the influence of price fluctuation has positive influenceon stability, the other three variables on commodity prices over time showed theinfluence of different level. Especially the monetization degree effect on the pricefluctuations is relatively sharp. Although the expression is the declining all the time,it still keep the positive pulling effect.At last, in view of the actual factors on the fluctuation of prices, based on outputfactors affecting price influence, after analyzing the correlation between the outputgap and inflation rate, and based on the Phillips curve of the "price-output", weestablished the time-varying parameter state space model analyzing the changes intrends of the output gap and inflation rate over time, through the analysis ofelasticity of output gap and the slope of the aggregate supply curve moves, weconcluded that in the current and recent period of time, we can change the aggregatesupply to increase economic growth, meanwhile the effect on the price volatility islimited, therefore, we can improve the quality and efficiency of economic growthbetter. According to expanding the domestic demand, stimulating the aggregatedemand to improve the economic growth will not make greater pressure to the price.