Inflation Expectations And Its Influencing Factiors Analysis

Inflation expectation has a significant role in economic development. In recent years, the periodically occurred inflations have impacted China’s economy deeply. Economic agents would change their economic behavior through expectation, thus influencing the economy. Therefore, research on inflation expectation management could be relied in policy-making as well as economic growth.This research, based on the mechanism of inflation expectation, adopted the qualitative approached questionnaires for urban depositors by the People’s Bank of China to get the estimated scale of inflation expectation through difference and improved fisher methods. It shows that the estimated scale has a sound effect in performing real inflation trend and fluctuation. A SVAR model was established to analyze the impact factors to inflation expectation. In terms of variables, this research chose six, namely, output gap, real inflation rate, money growth rate, real estate price, wage gap and oil price etc. from macroeconomic policy, asset price and cost-push aspects. Desirable conclusions are conducted by Granger causality test, impulse response function and variation partitioning.This research has concluded that economic period represented by output gap is the greatest impact factor, while money growth rate is the longest in inflation expectation. The importance of impact factors for inflation expectation is different in short and long term. Oil price has much greater impact than people’s imagination. Real estate price is one of factors that raise future price expectation while not being influenced much by the latter. This phenomenon could be effectively explained by government intervention in house price. Meanwhile, the former expectation has great impact on the latter one since expectation is self-fulfilling. These conclusions are of great significance in establishing a factual foundation for macroeconomic policy making.