Abstract: The CPI and the PPI are important indexes of our country. In order to study the relationship between PPI and CPI, this paper analyzed the month data from January 2006to July 2017.First,this paper used seasonal adjustment to eliminate the influence of seasonal factors, then established the error correction model based on the cointegration test. The results show that there is a long-term equilibrium between CPI and PPI, and the short-term fluctuation of PPI would also have a significant effect on the CPI. 

Key words: Consumer price index, Producer price index, Cointegration, Error correction model