A Study On The Correlation Between CPI And Price Index Changes In China

Consumer Price Index(CPI)is an important indicator reflecting the overall price level in China.Prices are closely related to people’s lives.To keep CPI fluctuating within a reasonable range is one of the important goals of the central bank in implementing economic policies.Related studies have shown that the CPI and the related price index such as pork prices and producer prices have a certain relationship,the purpose of this study was to relative price changes affect the CPI in China launched a comprehensive analysis and study,probing into the cause of the changes in the CPI in China,as a response to rising prices and the change of effective basis,enable the government to monitoring and early warning and the changes in the overall price level in our country,in order to better cope with the macroeconomic fluctuation,the CPI remains within a reasonable range.This paper selects the monthly year-on-year data of PPI,pork price,core CPI and CPI from January 2000 to August 2020.Combined with the wavelet analysis method in the frequency domain analysis method and the spectral analysis method has the advantages of no loss of variable information on high frequency data processing has incomparable advantage over other methods,using the cross spectrum analysis and wavelet transform from two angles of time domain and frequency domain analysis correlation between CPI and the related price index,study changes in the CPI and food in our country’s biggest pork prices,core consumer prices excluding food and energy prices,producer price index(PPI)for industrial core CPI and PPI and pork price cycle correlation between.The main conclusions are as follows: the main cycle fluctuations of pork price,CPI,core CPI and PPI are basically the same.The fluctuation of pork price with a period of 41.7 months was the dominant force that significantly affected the fluctuation cycle of pork price and consumer price index,and the fluctuation of pork price was nearly 10 months ahead of the fluctuation of CPI.There is a high correlation between the two longterm cycle fluctuations.Pork price precedes CPI in long-term cycle fluctuations,and pork price is the Granger cause of CPI.Core CPI has a low correlation with pork prices.The correlaton between CPI and core CPI is very high in the whole cycle.CPI is ahead of the fluctuation of core CPI,and CPI is the Granger cause of core CPI.In the long run,the fluctuation with a period of 14.1 months is the dominant force affecting the cyclical fluctuations of CPI and PPI,and the correlation between the two is very high.CPI fluctuations come first,and the correlation between medium and short cycle fluctuations is low.CPI and PPI are Granger causality to each other.