The Superposition of Markov Chain and the Prediction of Consumer Price Index

Han Song; Liu Na

doi:https://doi.org/10.14445/22315373/IJMTT-V49P541

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 49 | Number 5 | Year 2017 | Article Id. IJMTT-V49P541 | DOI : https://doi.org/10.14445/22315373/IJMTT-V49P541

The Superposition of Markov Chain and the Prediction of Consumer Price Index

Han Song, Liu Na

Citation :

Han Song, Liu Na, "The Superposition of Markov Chain and the Prediction of Consumer Price Index," International Journal of Mathematics Trends and Technology (IJMTT), vol. 49, no. 5, pp. 267-273, 2017. Crossref, https://doi.org/10.14445/22315373/IJMTT-V49P541

Abstract

Using China's consumer price index historical data and the methods of Superimposed Markov chain to forecast the CPI of the year 2016 is a new channel in the CPI forecast. Firstly ,according to the relationship between China's consumer price index and inflation, divided the CPI into five states ; Secondly, using C-K methods to compute the order transition probability matrix; Thirdly, according to the CPI of 2009-2013 to forecast the situation of 2014,the CPI of 2010-2014 to forecast the situation of 2015;Forthly, compared with the actual situation, it is confirmed that the method of basing on the superposition of markov chain to forecast consumer price index is accurate. Finally, using the data from 2011-2015 to forecast CPI this year to provide theoretical basis for the government's macroeconomic regulation and the policymaking.

Keywords

Consumer Price Index; markov chain; inflation Introduction.

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