A Study On The Impact Of Inflation Expectation On Real Inflation In China

At present, most economists regard inflation expectations as a key factor to understand the dynamics of inflation, but how inflation expectations affect inflation mostly stay in perceptual knowledge and qualitative analysis. The effect mechanism of inflation expectation on real inflation is not much and Analysis of the relevant micro basis is somewhat lacking.Based on the above considerations, this paper attempts to start from the micro behavior of economic individual.Reference cross period consumption, utility theory and other classical theory analysis method, To study how inflation expectations affect economic individuals and then to real inflation. In the theoretical analysis section, the effect of inflation expectation on the economy is divided into income effect and substitution effect. Establish the effect of the total demand and the impact of inflation expectations micro foundation of the real level of inflation through the analysis of the two kinds of effects on consumer behavior and investment behavior. Then try to establish a mathematical model for the role of inflation expectation.On the basis of this, this paper will introduce the inflation model. And taking the data of the people’s Bank of China savings survey data from 2006 to 2015 to make an empirical test on the above demonstration. Empirical test results show that inflation expectations and real inflation are Grainger reasons. There is a long-term stable relationship between the two.In the fifth chapter, according to the conclusions drawn from the results of the model,combined with the main factors that affect the formation of China’s inflation expectations,the proposed targeted policy recommendations to promote better management of inflation expectations.