What is the basis for the rise and fall of the CPI, and what is the reference between inflation and

The rise and fall of the CPI is compared to the price level at this time last year. At present, the weight ratio of our country: 1

Food 34% 2Recreational, educational, cultural goods and services 14% 3Residence 13% 4

Transportation and communication 10% 5Healthcare Personal Products 10% 6Clothing 9% 7

Home Equipment & Repair Services 6% 8Alcohol, tobacco and supplies 4%.

Calculation method: The formula for calculating CPI is CPI = (the value of a group of fixed commodities calculated by the current period ** and the value of a group of fixed commodities calculated by the base period **) 100.

For example, if in 1995, the cost of an average household to buy a group of goods per month was 800 yuan, and in 2000 the cost of buying this group of goods was 1000 yuan, then the consumption index of the country in 2000 was (based on 1995) CPI = 1000 800 100 = 125, that is, 25%.

The Consumer Price Index (CPI) is an index of price changes that reflect the statistics of goods and services related to residents' lives, and is usually used as an important indicator to observe the inflation level. CPI >3% inflation, CPI >5% serious inflation

As we all know, CPIIndicates the consumer consumption index, PPI isIndustrial Production** Index。If during the same period, CPI**PPI**, it may illustrate the following questions.

1. CPI** indicates that the consumption level of residents has increased recently, but it is only an increase in demand for daily necessities. The decline in PPI shows that the manufacturing industry and industry are declining, and at this stage, China is still dominated by industry and manufacturing, and CPI and PPI have been poor for a long time.

then the country's economy may stagnate;

2. The decline in CPI and PPI in a certain period of time may indicate that there is overcapacity in the manufacturing industry, indicating that people's demand for industrial manufactured products has decreased during this period, so for industrial enterprises, the reduction of profit margins will undoubtedly be affected.

3. CPI**, the decline in PPI may bring some pressure to **, because the profits of manufacturing and industrial enterprises have decreased, and the secondary market.

If the funds are not sought after, the ** economy is not good;

In economics, this situation is called recessionary inflation, that is, the demand for consumption levels increases, but the demand for industrial products decreases, and this imbalance will eventually come from the means of production.

It is transmitted to the means of consumption, causing the economy to contract as a whole.

CPI is the abbreviation of the consumer consumption index, which reflects the changes in the goods and services paid by consumers. CPI** means inflation to a certain extent, generally speaking, when the CPI increases by more than 3%, it is inflation; And when the CPI increases by more than 5%, it is severe inflation.

For example, the CPI in February was **7% year-on-year, which means that if in February last year, the cost of ordinary families to buy a certain group of goods was 100 yuan, then it will take about 107 yuan to buy the same goods in February this year. To a certain extent, it is explained that the residents' money is becoming less and less valuable.

At the same time, it is not absolute, because CPI is an average, and when using CPI, it is necessary to look at the change of the overall level as well as the change of the different categories within it. The overall level does not imply that all items of goods and services are comprehensive.

Causes of inflation

Inflation refers to the general price of goods over a period of time, and the four main reasons for inflation are: excessive amount of money; cost-push; Demand increases, supply is insufficient; Structural dysfunction.

1. There is too much currency

The increase in the amount of money is the most direct reason, and the excessive amount of money corresponds to the established amount of goods and services, which will inevitably lead to currency depreciation, prices, and inflation.

2. Cost push

When the amount of money increases, the price of some commodities will rise, and after the cost increases, the relevant industrial chain will lose money if it does not follow the price increase, so inflation may also occur when the cost increases.

3. Demand increases and supply is insufficient

China is a country with a large population, and the demand for goods will only increase unabated, and in the case of too much currency, "hoarding" has become the first choice, but in fact, the amount of goods is small, and the demand for more will lead to general prices.

4. Structural disorders

Inflation can be expected, but if the expectations are wrong, then the wrong economic policies will be formulated, which will lead to an imbalance in the industrial structure.

The inflation rate is generally measured by the consumer consumption index (CPI), and the international CPI increase of 3% is usually taken as the inflation warning line.

1) The relationship between CPI and inflation.

CPI, that is, the consumer consumption index, is the cost of ordinary people to buy daily necessities, that is, the trend of daily necessities. When the CPI rises, it means that the price of social goods is rising as a whole. If the price of a particular product in an economy rises, the market can still consider it normal; However, if the price of all products rises generally, it means that there is an abnormal correspondence between money and commodities in the market, that is, the quantity of money exceeds the needs of the market, and inflation will occur in the economy.

Prices are not all inflationary, but on the contrary, inflation inevitably causes prices and drives up the CPI.

2) Criteria for judging inflation.

Internationally, the CPI increase of 3% is usually taken as the warning line for inflation. But just because the CPI has risen by 3% does not mean that it is inflation. There are two criteria for determining whether inflation occurs: first, the majority of goods and services in an economy are generally present and increase by more than 5%; The second is that this kind of ** lasts for a long time, and prices are generally ** for more than two months.

If both of these conditions occur in an economy, macroeconomics says that the economy is experiencing inflation. In other words, the price level is comprehensive and continuous, and it is inflation. In a strict sense, inflation is not directly caused by the CPI, but caused by the amount of money in circulation exceeding the actual needs of the economy.

The Consumer Price Index (CPI) 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. Generally speaking, it should beWhen CPI is greater than 3, it is inflation；IfIf the CPI is less than 1 or has been declining continuously, it indicates a slight deflation.

In economics, inflation is the increase in the average price level (based on inflation). Using the analogy of a balloon, if its size is the price level, the inflation rate is the degree of balloon inflation. Or, the degree to which inflation declines in the purchasing power of money.

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

The Consumer Price Index (CPI)

PriceIndex), abbreviated as CPI, is a price change index that reflects the statistics of goods and services related to residents' lives, and is usually used as an important indicator to observe the inflation level. Generally speaking, when the CPI increases by >3%, we call it inflation; And when the CPI increases by > 5%, we call it severe inflation.

constitutes the indicator.

The main commodities are divided into eight categories, including: food, wine and beverages, housing, clothing, education and communications, transportation, medicine and health, entertainment, and other goods and services.

CPI is calculated by CPI = (value of a group of fixed commodities in the current period ** Value of a group of fixed commodities in the base period**) 100%.

For example, if in 1995 the average household in a country spent 800 yuan per month on a group of goods, and in 2000 the cost of buying this group of goods was 1,000 yuan, then the country's consumption ** index in 2000 was (based on 1995) CPI=

1000 800 100 = 125, that is, 25%. In everyday life we are more concerned with the inflation rate, which is defined as the percentage change in the level from one period to another, and the formula is t=(p1—p0).

p0, where t is the inflation rate of period 1, and p1 and p0 represent the ** level of period 1 and period 0 respectively. If the level is measured by the consumption index described above, the inflation rate is the percentage change in the consumption index over different periods. If an economy's consumption** index increases from 100 last year to 112 this year, then the inflation rate for this period is:

t=(112-100) 100 100%=12%, that is, the inflation rate is 12%, which is expressed as 12% of prices.

Inflation refers to the phenomenon of sustained and widespread price depreciation for a period of time caused by the fact that the money supply is greater than the actual demand for money, that is, the actual purchasing power is greater than the output supply, which leads to the depreciation of the currency.

CPI is an important macroeconomic indicator that reflects the changes in the level of consumer goods and services related to residents' lives, and is also an important indicator for macroeconomic analysis and decision-making and national economic accounting. Generally speaking, the level of CPI directly affects the introduction and intensity of the country's macroeconomic control measures, such as whether the central bank raises interest rates and adjusts the reserve requirement ratio. At the same time, the level of CPI also indirectly affects the changes in the capital market (such as the first market, the first market, the first market, the capital market, and the financial market).

The purpose of compiling the household consumption index is to understand the basic situation of changes in all parts of the country, analyze and study the impact of changes on the social economy and residents' lives, meet the needs of formulating policies and plans at all levels, and carry out macroeconomic regulation and control, as well as providing reference and data for national economic accounting.

A rise or fall means that the rate of change reflects the degree of inflation or tightening to some extent. Generally speaking, inflation is considered to have occurred when prices are comprehensive and persistent.

Generally speaking, the greater the CPI, the greater the inflation rate, the consumer price index, abbreviated as CPI, is a price change index that reflects the statistics of products and services related to residents' lives, usually as an important indicator to observe the inflation level, as follows:

1. The price consumption index is an economic term, and it is usually used to measure the overall level of change in prices in the market, which is equivalent to the inflation rate at another level. When the general level of prices in the market rises, it means that local prices have skyrocketed and inflation has occurred. When the CPI falls, it means that the local goods** are declining and the inflation rate is lower.

It can be said that the consumption index of prices is an important indicator to measure the inflation rate of the economy.

2. The relationship between the price consumption index and inflation is close, and it is also an important indicator to measure inflation in economics. In different countries and regions, people can see the degree of inflation in this country by judging the rise and ** of the price consumption index. Generally speaking, the rise in the price and consumption index is slower and less tolerant of inflation in developed countries, and much higher in developing countries.

Theoretically speaking, inflation is only a problem caused by the real economy, but now because of the development of the virtual economy, it will also impact the real economy after the release of water, and the inflation rate of the economy will change, which is completely affected by the price index over the years.

3. CPI will affect inflation, reflecting the demand for currency in commodity circulation, inflation is common in many countries and regions, which is a common monetary phenomenon.

4. In the process of practice, the direct impact of the continuous growth of CPI is that inflation is becoming more and more serious. The demand for money in commodity circulation has also begun to increase, but the central bank has become less and less in the amount of money issued, which further leads to serious inflation.

5. Inflation is a real problem, which refers to the large increase in various goods and services, just after demand, consumption is easy to downgrade, combined with the number of social production cycles, stop to the time when daily necessities must be produced, then there will be a great depression of the economy, especially in some countries with weak consumption cycles, the exports and investment to support the cycle will become less and less, and when inflation occurs, the economy will fall into a shutdown, and almost no country can be unaffected.