Analysis Of Factors And Trend On The Price Fluctuation In China

Price as a barometer of national economic development, its fluctuation is not only closely contacted with macroeconomic operation, social stability and more related to people’s life. In the process of economic operation, the change of economic indicators such as the total amount of the money supply, import and export, foreign exchange reserves and economic growth can lead to price fluctuation. Price fluctuation and its impact factors has been a research focus of domestic and foreign scholars. Price fluctuation itself also has a certain regularity, so find the regularity of its price fluctuation, make a scientific prediction of the short-term price movements in the future that would be particularly important.First this paper has carried on the system elaboration and summary of the related theories and overseas and domestic research status of price fluctuation and then preliminary draw the main factors affecting price fluctuation. Combination of monthly data availability, select several economic indicators such as money supply (M2), industrial production (IND), foreign exchange reserves (FE), imports (IMP), exports (EX), and completed amount of fixed investment as the variable to construct the vector autoregression model to study their impacts on price fluctuation. Before modeling, first carry out unit root test and cointegration relationship test on each economic indicator and the make the variables granger causality analysis of the CPI. Based on vector autoregressive model with a lag period4and standard impulse response function, this paper analyzes all variables of the impact of price fluctuations.Based on the relationship between the fixed base sequence and a year-on-year sequence, this paper transforms the year-on-year sequence of China’s consumer price index (CPI) from January2001to December2012into the fixed base sequence of China’s consumer price index (CPI) each month in the year2000as the base period. According to the CPI fixed base sequence timing diagram and in combination with current affairs, this paper analyzes the characteristics of price fluctuation in our country. First make first-order differential and first-order seasonal differential with non-stationary CPI fixed base sequence and then utilize SARIMA differential stable sequence to model. While optimize the three models through white noise test and the stationary test according to the AIC, SC and accuracy principle to obtain the optimal mode SARIMA(1,1,1)*(1,1,1)12. And test the accuracy of the model by altering sample interval. In the end the price movements of2013is forecasted based on SARIMA(1,1,1)*(1,1,1)12.The innovation of this paper includes the following points:Firstly, compared with existing research, our data sample of empirical analysis from January2001to December2012is bigger and newer, and the latest research results would be more credible. Secondly, we use SARIMA model to match the fixed base sequence of China’s consumer price index (CPI) each month in the year2000as the base period. It gives full consideration to the CPI sequence season characteristic, and depicts the price evaluation trend of a more scientific; Lastly, the mathematical models of price fluctuation trend established based onSARIMA is carried out precision analysis. And it would be more credible through making use of the model tested by the accuracy precision analysis to predict the future price fluctuations.