The Qualitative Research of Inflation Dynamic Inertia Characteristics and the Effect of the Monetary Policy Regime Switches (12JJD790015)

The Qualitative Research of Inflation Dynamic Inertia Characteristics and the Effect of the Monetary Policy Regime Switches (12JJD790015)


Leader Jin Cheng-xiao

Members Jin Cheng-xiao,Lu Ying-chao

Origin N/A

Fund 1

Duration 2013.1-2013.8

Introduction

In this paper, due to the inflation inertia has different characteristics in different regime, we use a MS-DSGE model to analysis that monetary policy has different effects to control inflation in different regime.  The results show that: (1) The inflation in China exists the district division, inertia characteristics obviously, and the low inflation regime makes an average duration of 25 months, the high inflation regime makes an average duration of 11 months.  High inflation state corresponds to the larger policy fluctuations; (2) From the view of mathematical and empirical prove, The policy transition between different system can't impact on the inflation expectations.  (3) There are the asymmetry impact of the policy conversion to the output gap, actual inflation ,  Interest rate and other variables.  The innovation of this paper is that: (1) We add the effect of regime switching to the DSGE model; (2) In the MS-DSGE model, the household sector understands the policy information ob


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