Author(s)

Rui Pan ¹

Affiliation(s)

¹ Adam Smith Business School, University of Glasgow, Glasgow, Scotland, G12 8QQ, UK

Corresponding Author

Rui Pan

ABSTRACT

Inflation is an important phenomenon in the economic field, which profoundly affects residents' consumption behavior. This paper comprehensively analyzes this impact. Firstly, it elaborates on the concepts and measurement indicators of inflation, including CPI, PPI, etc. Inflation changes residents' consumption behavior by influencing consumption capacity (such as the shrinkage of real income, wealth effect), consumption structure (adjustment of consumption of necessities and non-necessities, durable and non-durable consumer goods) and consumption expectations (changes in consumption decisions based on price trend expectations). Different income groups are significantly differently affected, with low-income groups being highly sensitive and high-income groups being relatively stable. Changes in residents' consumption behavior, in turn, have a reverse impact on the macro-economy, affecting aggregate demand and price levels. Finally, countermeasures are proposed from the government, enterprise and resident levels, aiming to stabilize the consumer market and promote the healthy development of the economy.

KEYWORDS

Inflation; residents' consumption behavior; consumption structure; different income groups; macro-economy

CITE THIS PAPER

Rui Pan, The Impact of Inflation on Residents' Consumption Behavior. Financial Engineering and Risk Management (2024) Vol. 7: 133-137. DOI: http://dx.doi.org/10.23977/ferm.2024.070617.

REFERENCES

[1] Chen Hui. Research on the Savings Behavior of Chinese Residents [D]. Dongbei University of Finance and Economics, 2015. 
[2] Lu Yan. The Double-Threshold Effect of Inflation on the Consumption Expenditure of Residents at Different Income Levels [D]. Chongqing University, 2013.
[3] Gao Ya. Research on the Influence of Monetary Policy on Residents' Consumption-Saving Behavior [D]. Xiangtan University, 2012.

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