Regulation of Relative Price in the Variability of China General Price Index and Implications of Macro-economy Control

The relationship between China relative price variability and inflation is analyzed in this paper from Jan.2001 to Feb.2008 in view of foreign literatures,the result shows that there is positive relationship,and the relative price is variable when inflation is rising.Then,the mechanism of relative price variability is studied and hold that the relative price variability could stem from all of the elasticity of different goods demand to income,demand shock and supply shock.In the end, the paper points out the implication of relative price variability for macro-economy control.