ABSTRACT
In recent years, China’s Consumer price index (CPI) has seen obvious fluctuations, and the national economy has been buffeted by fluctuations in the CPI inflation rate to varying degrees in such spheres as production, consumption, and investment. At the same time, whether there is a dynamic transmission effect among different price indices in the chain from production to consumption has great significance for the dynamic adjustment of macroeconomic policies. The dynamic trend of the sub-components of the overall price index can provide useful information for analyzing the corresponding specific price index. A multivariate dynamic model system needs to be established for analyzing the dynamic transmission mechanism of different price indices. The establishment and estimation of the error correction model chiefly involves the cointegration vector and adjustment coefficient.
