An Empirical Analysis Of Influence Of The Media Reports To The Public Inflation Expectations

The management of inflation expectations has always been the hot spots ofeconomy and society.The central banks of different countries also often emphasizethe inflation expectations of the public managemen,which has become one of theimportant tasks of the central banks.In recent years,China has experiencedseveral large inflation cycle,which had caused a great impact on China’s macroeconomy operation.As is known to all,the economic subject’s anticipation of the societyto macro economy operation can change their economic behavior,which will affect theoverall macroeconomic operation.However,that we still know less about the form ofpublic expectations of inflation.At present, most scholars consider that the publicexpectations of inflation has be affected by such real economic factors which likethe actual inflation rate, GDP gap, the rate of monetary growth, asset prices,etc. but theresearch of the relationship between media and the public inflation expectations arerelatively few.The existing research at home and abroad just focu on the relationshipbetween the numercal size of the public inflation expectations with media reports,thesepapers did not give the further research on the accuracy relationship between thepublic inflation expectations with media reports, on the other hand, the existingresearch is only to analyze the effect of the public inflation expectations from the pressand media,but there is no research on the network media.In this paper, on the basis of introduction of public inflation expectations formationand The mode of formation,we analyse the influence mechanism of media coverage topublic inflation expectations in-depth. As we know, the information is a crucial role inthe process of form of the public inflation expectations toeconomic subject.Ingeneral, the public is unlikely to form the public inflation expectations inflation usingsome macroeconomic data and econometric methods like experts, they are more likelyto get information from the media coverage of macro economic cognition, rather than toby taking much more time and energy to look forward to the latest statistical data toform their own prediction of the macro economy operation, then the formation of thepublic inflation expectations may be related to media reports.This paper introduces the properties and formation of the public inflationexpectations from all aspects,analysises the influence mechanism of media reports to thepublic inflation expectations.Then the use of difference method and the improvedmethod of probability turns the qualitative data of people’s Bank of China into quantitative data,after the comparison of two methods,in the final we get the data ofpublic expectations of inflation.In order to get the accuracy of public expectations ofinflation,we compare the public inflation expectations to the professional inflationexpectations of "longrun forecast".At the same time,we search the title and full textRespectively from the "giantfinancial services platform" and the "Baidu advancedsearch",acquired the number of news media and network media reports about the pricerise, drop,or unchanged, and then get the gross and net of prices media report.On thebasis of above data,we use dynamic modeling method to study the relationship betweenthe public’s inflation expectations and the media reports,and the relationship betweenthe accuracy of public inflation expectations and the media reports.This paper shows media reports has a significant impact on the numercal size ofpublic inflation expectations:(1)For newspapers media sample report,every additionalan article about rising prices report makes public expectations of inflation rise by anaverage of0.0147%-0.0382%.while for the network media report, every additional anarticle about rising prices report makes public expectations of inflation rise by anaverage of0.0023%-0.0050%.(2)In addition,to the study of relationship between theaccuracy of the public’s inflation expectations and media report, regardless of thenewspaper media report or network media report, that both sides show that more newsreport of media about prices change or frequency is larger,more closer will thepublic expectations of inflation deviate from the the rational expectations, namelypublic expectations of inflation will be more accurately.(3)This paper further exploredthe existence of the "media misleading", research shows that there is a significant "thenetwork media misleading", but there is no evidence shows newspaper media alsohas this kind of effect to the accuracy of public inflation expectations.