StudyontheImpactofInflationontheStockMarketinChina.pdfVIP

International Journal of Business and Social Science Vol. 5, No. 7(1); June 2014 Study on the Impact of Inflation on the Stock Market in China Zhongqiang Bai School of Management Shanghai University of Engineering Science China Abstract The stock price is subject to the effects of inflation, the relationship between the two is exactly what kind of relationship has been great concern. Fisher effect” is discussion of the relationship between inflation and capital gains. Of the clear view that the inflation rate = nominal rate of return - the actual rate of return. This paper introduces the Shanghai Composite index of stock prices and on behalf of the CPI index of inflation, in order to more accurately detect and verify the impact of inflation on stock prices, the above index, the least squares fit to the trend toward the use of Excel and correlations, and significant at the same time the use of the VAR model, impulse response and variance decomposition, econometric methods more in-depth study for the relationship between the results more credible. Have verified the findings of this article, combined with the actual situation of Chinas economic development process and then analyze and discuss the feasibility of high specific policy proposals, such as policy formulation in line with inflation current and future trends, respect for objective facts and reasonable policies. Keywords: capital markets, inflation, stock prices, the CPI Introduction The problem of inflation in China can be called the key of Chinese economic whether can further growth. Due to many factors, such as interest rate, exchange rate volatility, liquidity surplus, pressure of appreciation o