Building And Analysis Of Composite Price Index Of Shandong Based On The Rate Of Inflation

Shandong Province is a big province,as a major economic Province of China,it hassignificant influence on China’s economic development.The analysis of the fluctuation ofprices in Shandong province will has great help to the whole economic system.In thispaper,we constructd a composite price index to reflect the fluctuation of prices in ourprovince,and then analyse extent of prices level in our province.It can help our province tomake the policy which can help to control prices of our province.In the current,most of scholars used a single index such as the consumer price index(CPI),the producer price index (PPI) or the commodity retail price index (RPI) to researchthe extent of the fluctuation of prices,which is not comprehensive.Due to our provinceactual characteristics of Shandong province such as the large population in our provinceand the high-speed economic development in recent years. Consequently,based on theexisting nine price index,the study used an econometric analysis software(SPSS) toconstruct a comprehensive price index.In follows acticl,we measured rationality of thecomprehensive price index of shandong province.Then,we found that was more accuratelyafter we have adjusted comprehensive price index by using seasonal adjustmentmethods.Through empirical research and analysis,we can come to a conclusion that thenew comprehensive price index can be an exact measure to reflect the characteristics of thefluctuation of prices in our province.Third,learning from foreign experiences at home and abroad,we established aneconometric model of the rise of prices in our province.Then we can explore quantitativerelation beteen the fluctuation of prices and its influencing factors.All above,through the qualitative analysis and quantitative research in this paper,wefound the quantitative relation beteen the fluctuation of prices and its influencingfactors.Based on the empirical results,we put forward to reasonable poliey suggestion tostabilize the price in our province.