Research Article
Dynamic Fitting of China's Inflation Based on Polynomial Distributed Lag Model
@INPROCEEDINGS{10.4108/eai.9-12-2022.2327689, author={Lei Shen and Yi Zhou and Zebin Liu and Yeguo Sun}, title={Dynamic Fitting of China's Inflation Based on Polynomial Distributed Lag Model}, proceedings={Proceedings of the 4th Management Science Informatization and Economic Innovation Development Conference, MSIEID 2022, December 9-11, 2022, Chongqing, China}, publisher={EAI}, proceedings_a={MSIEID}, year={2023}, month={3}, keywords={inflation; unemployment rate; output gap; phillips curve}, doi={10.4108/eai.9-12-2022.2327689} }- Lei Shen
Yi Zhou
Zebin Liu
Yeguo Sun
Year: 2023
Dynamic Fitting of China's Inflation Based on Polynomial Distributed Lag Model
MSIEID
EAI
DOI: 10.4108/eai.9-12-2022.2327689
Abstract
China's economic growth has changed from high-speed to medium high-speed under the new economic normal. The declining growth rate could be accompanied by inflation and a decline in the unemployment rate. By combing the relevant theories of the Phillips curve, a polynomial distributed lag model is established to dynamically fit inflation by screening the consumer price index to represent inflation, and output gap data replace the unemployment rate. The results show that the output gap of the current period and the lagging period positively impact inflation. The smaller the value of the output gap is, the higher inflation and unemployment China will have. Additionally, the parameter value shows that the impact of the first-order output gap on inflation is higher than that of the current period, indicating a noticeable lag effect in the reflection of inflation on the unemployment rate.