Chinese Inflation Expectations Factors

A major national economic objectives pursued included the promotion ofemployment, price stability, balance of payments and to maintain economic growth. ForChina, rapid economic growth, foreign exchange reserves, the employment rate hasbetter performance. But in recent years, the crises and challenges began in2007broughtinflation has repeatedly occurred. How to stable price became the top priority of ourgovernment. This study discusses full account of several major factors that affect inflationexpectations. The results will be effective for our government in preventing the occurrenceof inflation by providing guidance.Through the collection of relevant data of inflation expectations, according to researchdata to research various factors and relevant factors affecting the situation, combined withthe real data, such as CPI, M2growth, job gap, the output gap, etc., by building SVARmodel, according to Granger, stable items and root test results, the constructed model, theerror decomposition and pulse analysis, and ultimately be affected based on the results ofthe size, duration, and lag analysis of the situation, and in accordance with theconclusions of the prevention of inflation expectations put forward correspondingcountermeasures.