Empirical Study Forkeynesian Phillips Curve And Inflation Of China Based On Markov Regime Switching Model

The early reform and opening up,China's economic operation performance for"high growth,high inflation and high volatility" characteristics,into this century,performance turn into the "high growth and low inflation,stable" track,no matter from the level of numerical or volatility measure,inflation in China is from high to low,at the same time the trend of continuous or inertia is still high.Output and prices are the two most important variables of the Macro economy,and the relationship between them can be characterized by Phillips curve.Since it was put forward,the theory model is constantly revised and improved.On the one hand,it can well describe dynamic change characteristics of inflation in the short term;on the other hand it also holds the indispensable role in the transmission mechanism of monetary policy.Reasonable dynamic variation characteristics of inflation has paved the way for the prediction the future trend of inflation,as well as to prevent and dissolve the inflation provides the corresponding solution.In addition,in order to make the most reasonable monetary policy,we should do some in-depth study of dynamic characteristics of the inflation.New Keynesian Phillips curve,with solid micro foundation,has become the important research framework of dynamic characteristics of the mechanism.Therefore,in this paper,on the basis of this framework we make empirical research of the Phillips curve dynamic characteristicsfor our country.First,in this paper,according to the development of Phillips curve on the overview,mainly introduced the new Keynesian Phillips curve of three kinds of forms.Then,based on 1 January 2001 to February 2016 from the consumer price index as a measure of the rate of inflation,according to the results of the separation of the HP filter,wejudged the dynamic characteristics of the rate of inflation from the perspective of qualitative,then make the research on the quantitative analysis on the dynamic characteristics of the rate of inflationrespectively based on the simple linear regression model and Markov transfer zone system model.Finally,this article is based on Markov area system transfer model do empirical research for the new Keynesian Phillips curvebased on adaptive expectations,rational expectations and mixed expectations.Researchon the basis of the analysis and evaluation to provide the corresponding policy recommendations for government decision-making,this part is the core content of this article.The empirical results show that the new Keynesian Phillips curve has obvious("double stage")dynamic change characteristics,and in different conditions,the contribution of inflation is different."High inflation area",inflation inertia coefficient(0.516)slightly higher than inflation expectations coefficient(0.48);"low inflation area",the inflation inertia coefficient(0.45)significantly less than expected inflation coefficient(0.536).In addition,the output gap coefficient is not significant,in the empirical studyofthe new Keynesian hybrid Phillips curve,no significant output gap is a common phenomenon(Rudd and Whelan,2005).But that does not deny the actual economic situation in determining the role of short-term inflationary pressures.Due to theestimate of the output gap in the "high inflation area" higher thanthe "low inflation area",to a certain extent,the phenomenonshows the underhigher inflation pressure,output gapwill have a greater positive influenceto current inflation,namely,the higher the output gap,the greater the inflation.Through empirical research,this paper argues that we should reduce inflation inertia and manage inflation expectationsin the implementation of monetary policy of our country.Based on the results of the theoretical model and empirical analysis,and combining the experiences and lessons of other countries monetary policy,in this paper,we put forward the following suggestions for our country's monetary policy practice:according to our country's current economic inflation,the central bank should be integrated use of various monetary policy tools to solve the corresponding problems.As in "high inflation zone",the central bank through strengthen the "hedge" of open market operations and improve the corresponding deposit reserve ratio to tightening monetary policy;In "low inflation zone",the central bank can increase reverse repurchase by the open market operations,the use of price leverage to stabilize the social public expectations,thereby slowing the risk of the economy is in recession and deflation.