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An Empirical Analysis on Influencing Factors of China’s Price Fluctuation Based on Dynamic Factor Model
Pages: 51-56+59
Year: Issue:  6
Journal: Xi'an Finance

Keyword:  dynamic factor modelprice fluctuationinfluencing factor;
Abstract: Using factor analysis method, the paper picks up 5 public factors from 16 macroeconomic indicators related to the price,and then establishes VAR model to analyze the impact and influence of various factors on price factors through the impulse response function and variance decomposition analysis. The results show that in the short term, the active world trade has inhibitory effect on China’s price level. The rapid growth of the economy, the improvement of residents’ consumption level and the increase of money supply can lead to a rising prices. In the long run, the price increase is a monetary effect. In addition, for China, monetary factor contributes most to the price fluctuation, and others are price itself, macroeconomic factors, international factors, demand factors. Finally,according to the current economic situation, the paper puts forward countermeasures and suggestions from four aspects such as creating a stable financial environment, accelerating the economic restructuring and industrial upgrading, enhancing the capacity of residents’ consumption to expand consumption demand and comprehensively deepening the price reform of resources products and so on.
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