The Study Of Core Inflation: Based On Open Economic Condition

"Core inflation" indicator for forecasting future economic conditions, theformulation of macroeconomic policy has important significance. Compared with theCPI, core inflation more accurately reflect the long-term potential of a national pricetrends, and give monetary policy makers to provide important theoretical reference,but my body is still very relevant in the traditional inflation, which the traditionalapproach is not conducive to the formation of the correct public inflation expectations,will exacerbate the degree of fluctuations in the economy, so China should establish acomplete set suitable for China’s core inflation system as soon as possible, the paperin this context, to be our core inflation Research.this paper is mainly based on the understanding of Quah and Vahey about coreinflation, With the extended SVAR model, in an open economy, studying externalfactors (imported commodity price index) impact on our core inflation, using the fourvariables SVAR model includes output, consumption price index, money supplyand imported goods price index estimates core inflation, according to the results ofcore inflation measure, analyze the characteristics of core inflation, and analyze theeffectiveness of monetary policy based on forecast results, and forecast the futuretrend of core inflation。The results show that： the price index of imported goods is very importantfactor of inflation, should be included in the calculation of core inflation in the model,and the results of model calculations obtained through between CPI and core inflationexcluding law was between the graph can be a good explanation of inflation, inaddition, a strong correlation with the CPI and some other measurement methods andresults of this paper estimates of the money supply between the explanatory variablesused in this paper have its rationality.