Forecasting Inflation in China

Abstract

ABSTRACTWe discuss theoretical foundations of inflation dynamics and which indicators can measure the influencing factor of China’s inflation rates and select an indicator capable of providing additional information. We next select further from the indicators, examining previous recursive forecasts based on the special historical background of the preparatory projects for the Twelfth Five-Year Plan and the economic structure model. Then forecasting effects of the thirty-six integrated models, which construct indicators of various factors subjected to the previous forecast inspection, are researched. Finally, some conclusions, such as which integrated models can be used to forecast China’s inflation rates, are determined.