The Mechanism And Governance Of Inflation In China At Present

Inflation has long been a hot research problem in the field of economics and finance, and any problem can not be repeatedly discussed like it. In the different economic development, the mechanism of inflation is different. Inflation is a recurrent chronic which affects the healthy development of many national economy and involves a country’s economic and social stability and people’s life level. According to the different mechanism of inflation, however, the government must make different policy. Consequently, based on relative literature of inflation, this paper attempts to use the qualitative analysis and quantitative analysis to carry out the comparative analysis of mechanism of China’s inflation since 2002, and it puts forward the political recommendations of handling China’s inflation at the present stage. Firstly, this paper makes a theoretical analysis on inflation; Secondly, this paper carrys out the comparative analysis of the basic situation and characteristics of each round of inflation in China since 2002, and explains the basic reasons and factors leading to China’s inflation, then summaries the occurrence mechanism of the current stage of China’s inflation and conduction mechanism; Thirdly, from the perspective of classification of commodity price index, this paper analyses China’s inflation at the present stage; Finally, it puts forward the political recommendations of handling inflation.Through the empirical analysis, this paper finds the inflation of our country at the present stage is mainly due to the growth rate of the social total retail sales of consumer goods, of the index of international energy market price, of quasi-money supply and the rising prices of food commodities, while the increase of the actually utilized foreign direct investment amount has certain effect to restrain inflation. So, this paper contends that the government should take some measures to restrain inflation of our country at the present stage, such as change the mode of economic development, improve the efficiency of monetary policy, improve liquidity management and utilize more foreign investment.