A Study On The Movement Characteristics Of Inflation In China

The objectives of macroeconomic policies include full employment,price stability,economic growth and balance of international payments.In recent decades,China's economy has maintained a rapid growth and created a miracle in the history of human economic growth.Such a rapid growth is linked to the accurate interpretation of the economic situation and the proper implementation of macro policies by the policy authorities.With the rapid development of China's economy,the level of inflation is also one of the important social problems.Recently,China's economic operation has gradually entered a "new normal" period,and the economy presents new features.At the same time,we also need to focus on the problem of inflation.This paper mainly studies the movement characteristics of China's inflation and its influencing factors in recent years.The movement characteristics of inflation mainly refer to the persistence and volatility of inflation.This paper first analyzes the movement characteristics of inflation in China through the AR-trend-bound model.The AR-trend-bound model is a bounded nonlinear model.The data used to measure inflation are monthly data of consumer price index(CPI),and the sample interval is taken from January 1997 to December 2017.First of all,this paper describes the statistics of inflation in China,and analyzes all previous inflation situations in China since 1997.Then we use AR-trend-bound model to get the persistence and volatility of inflation in China from 1997 to 2017.The results show that the persistence of inflation is high,and the volatility is cyclical and agglomerative.In addition,this paper also discusses the factors affecting the movement characteristics of inflation.Based on the data of inflation persistence and volatility derived from the AR-trend-bound model,a vector error correction model(VEC model)is established to explore the impact of monetary factors,economic growth,fixed assets investment and exchange rate on inflation persistence and volatility.The results show that monetary factors,fixed assets investment and the exchange rate of the dollar against the RMB will have positive impacts on the persistence and volatility of inflation in the long term,and economic growth will have a negative impact in the long term.Finally,this thesis gives some proposals according to research conclusions.