Abstract: Expectation is an important basis for future economic behaviors, and how to guide expectations has become an important issue for the central banks of every country. Based on the calculation of inflation expectations in China, through setting up the time-varying parameters model and identifying the driving factors of inflation expectations, this paper conducts an in-depth exploration into the impact of the practical policy operations of the central bank on inflation expectations. The empirical results show that the main factors affecting the inflation expectations of Chinese residents are the quantitative monetary policy, the price-based monetary policy and the actual inflation rate. However, firstly, the price-based monetary policy cannot play a reverse regulation role in a short term; on the contrary, it will worsen the inflation expectations. Secondly, the driving factors of inflation expectations have the nature of time-varying, whether in the number or in the action intensity, especially when the exchange rate does not affect inflation expectations after the exchange rate reform. Thirdly, housing prices and the imported inflation are not the factors affecting the inflation expectations of residents.

Key words: inflation expectations; monetary policy; model with time-varying parameters