What caused inflation in China in 07 08

A big reason is the holding of the Beijing Olympics! China's currency flows through fast, thus the economy is overheating, leading to inflation!

2008： 2009： 2010：

2014: 2015 is not out yet. If it was 100,000 in 2008, it is now only equivalent to 10 ((1+ thousand.

Extended Materials. 1. China's inflation rate.

The inflation rate is the default equivalent to the Consumer Index (CPI), and its increase can be found from the National Bureau of Statistics**, the average inflation rate for the whole year of 2018. The inflation rate, also known as the rate of change in prices, is the ratio of the excess amount of money to the amount of money actually needed, which is used to reflect the degree of inflation and currency depreciation. It is calculated by means of the Exponential Change:

Inflation rate (price rate) = .

II. Inflation Rate Formula.

Inflation rate = (current price level - base period price level) Base period price level The base period is to select the price level of a certain year as a reference, so that the price level of other periods can be compared with the level of the base period to measure the current inflation level.

In fact, the above is only one of the three methods of measuring the level of inflation, but it is the most commonly used, in addition to the GDP discount algorithm and the production index conversion method. After the 70s of the 20th century, as the floating exchange rate replaced the fixed exchange rate, the impact of inflation on exchange rate changes became more important.

Inflation means the level of domestic prices, and an economy is said to be experiencing inflation when the majority of goods and services in an economy are widespread for a period of time in a row. Since prices are a monetary representation of the value of a country's goods, inflation means that the amount of value represented by the country's currency decreases. In the case of the close interconnection of domestic and foreign commodity markets, in general, inflation and domestic prices** can cause a decrease in exports and an increase in imports, which will have an impact on supply and demand in the foreign exchange market, causing fluctuations in the country's exchange rate.

At the same time, the decline in the internal value of a country's currency will inevitably affect its external value, weaken the credibility of the country's currency in the international market, and people will expect the exchange rate of the country's currency to weaken due to inflation, and convert their holdings of the country's currency into other currencies, resulting in the exchange rate**. According to the law of one price and the theory of purchasing power parity, when the inflation rate of one country is higher than that of another country, the value actually represented by the currency of that country decreases relative to the currency of another country, and the exchange rate of the country's currency decreases. Otherwise, it will rise.

For example, before the 90s of the 20th century, an important reason for the very strong exchange rate of the yen and the original ** mark was that the inflation rate in these two countries has been very low. Inflation in the UK and Italy is often higher than the average for other Western countries, so the exchange rates of these two currencies are in a downward trend.

Because the first half of 2009 belongs to the deflationary period, the economy only picked up in the second half of the year, and the CPI only turned positive in December, so the ** index in 2009 is relatively low.

In practice, inflation is generally not calculated directly and impossibly, but indirectly expressed through the growth rate of the ** index. Because the consumer is the ultimate reflection of the commodity through all aspects of circulation, it most comprehensively reflects the demand for goods or surplus currency in commodity circulation.

The consumer index is the most adequate and comprehensive indicator of the inflation rate. Countries around the world basically use the consumer ** index (called the consumer ** index in China), that is, the CPI to reflect the degree of inflation.

Inflation is a monetary phenomenon in the final analysis, and there are four main reasons for its sakura balance, one is the excessive issuance of currency; the second is the shrinking supply of goods; the third is profit-pulling; Fourth, there is a general loss in business operations.

Macroeconomics says that the economy is experiencing inflation when the price level of most goods and services in an economy is widespread in different forms (both explicit and implicit) over a period of time in a row. According to this note, if there is only one commodity ** rise, this is not inflation. Only a sustained rise in the majority of goods and services is inflationary.

Measure: Inflation: The economics profession does not agree on the interpretation of inflation, and the concept that economists usually agree on is:

Under the credit money system, the amount of money in circulation exceeds the actual needs of the economy, resulting in a comprehensive and sustained depreciation of the currency and the price level. Generally speaking, the issuance of paper money exceeds the amount required in circulation, which causes the depreciation of paper money and the price of goods, which we call inflation.