| Measure Inflation expectations is a difficult problem in the academic circles. Inflation expectations as the subjective psychological indicators of economic subject, objectively affect their behavior such as consumption, investment and savings, which will have important influence on the actual inflation. However, uncertain inflation expectations can lead to economic recession, asset price volatility, thereby increasing economic uncertainty. So effectively manage inflation expectations is the premise to keep the healthy development of the economy, and manage inflation expectations must quantify them first. Due to the expectations is subjective psychological data of economic subject, thus measure its value is not easy.This paper firstly introduces the related theory of inflation expectations, and combing the domestic and foreign related research in the form of a literature review from the two aspects of the formation of inflation expectations and the existing measurement methods, which laid the theoretical foundation of research subject.Secondly, in the specific measure methods, based on a customer questionnaire survey report of the people’s bank of China,qualitative data can be converted to quantitative data to measure inflation expectations. Firstly,This paper detailly introduces the four methods of the academic common which used to measure inflation expectations-the difference method and probability method, improvement of C-P probability method and time-varying parameters method. Through the analysis of the basic hypothesis of four methods and calculation method, this paper summarizes the possible defects, Then, on the basis of improvement of C-P probability method, introduced the learning theory that simulate the expected forming process, which not only can overcome the non-stationary assumption of the sensitive interval, but also can measure out ahead of expectations with characteristics of forecast. According to different sample interval, the two new methods respectively named as recursive method and rolling method. By comparing their mean absolute error of MAE indicators, concluded that forecast effect of the recursive method was better than rolling method.Once again, on the application of inflation expectations, this paper, by using recursive method to measure of inflation expectations, estimates the Phillips curve in China. But, different from traditional Phillips curve, this paper extends the original curve by introduced the agricultural producer price index as the cost driver factors affecting the actual inflation, which based on a new Keynesian hybrid Phillips curve. Then, it estimated the time-varying parameters of the Phillips curve in China by using the method of Kalman filtering. The estimated results consistent with the least squares estimation results: The first-lagged of output gap and the price index of agricultural production, inflation expectations and inflation inertia can really affect the actual rate of inflation. Among them, the influence of the output gap is significant, but the effect is a reverse effect, this conclusion also indirectly proves that China has the Phillips curve;As a positive factor, the influence of inflation expectations in the period of low inflation is more significant for the actual inflation rate than high inflation period, and the conclusion shows that the government should strengthen to correctly guide the public inflation expectations in the period of low inflation in order to keep a watch on the potential for higher inflation; New factors of the price index of agricultural production and the actual inflation rate has a significant positive relationship. Therefore, coordinating supply and demand of agricultural products and stabling agricultural prices will play an important role in reducing the actual inflation rate.Finally, on the conclusion and policy advice, this paper trying to use the related research results to provide reference opinions for the government, which is on basis of summarizing the paper research conclusion. |
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