Abstract: By extending the consumption utility function and constructing the panel threshold model， this paper explores the nonlinear effect of inflation expectation on urban consumption growth. The findings indicate that when inflation expectation is below the threshold value， it will restrain urban consumption growth significantly. However， as inflation expectation exceeds the threshold value， it will make a positive contribution to urban consumption growth. In the meanwhile， the nonlinear effect of inflation expectation on urban consumption growth exhibits a significant regional difference. Based on inflation expectation changes， monetary policies together with tax， subsidy and social insurance policies should be implemented effectively so as to regulate urban consumption growth and strengthen the rational guidance of inflation expectation.

Key words: inflation expectation, urban consumption growth, panel threshold model