Deflationary Period Of The Economic Effects Of The National Debt Policy And The Boundary

Most economists have accepted the fact that china has entered a new period of deflation since the RPI (retail price index) droped in October 1 997 and CPI (consummer price index) droped in April 1998. The active national debt policy has been implemented to control the deflation conbined with moderate currency policy since then.The deflation status was not very steady in the implementing process of active national debt policy. The RPI was incresed 0.1% in the first part of 2000 and the price of prodution materials was also incresed at the same time. But such phenomena was not last a long time, many indexes indicated that the defaltion was upgraded after June 2001. The RPI was still at a low level although the whole national economy was running on a healthy orbit. Generally, the active national debt policy played well during the first round of defaltion treating, but the performance of such policy did not formulate a self-increasing mechanism of ecomomy development. That is the reason why deflation was fluctuating.The performances of national debt policies are different under different social backgrounds. The reseaches of national debt poliby in foreign countries are based on their unique enviroments. The pretext of their researches cannot be used in China. Our government is still exploring the solution of deflation because it's a new phenomena and the research time of national debt performance is short in China. The mainly reseaches of national debt policy we can find are some aggregate demand effect discusses of national debt policy. The responses of main economy bodies and the financial performance of national debt policy are rarely been studied. This research analyses some important performance of the active national debt policy during the time of deflation on the aspects theory and quantity test. The whole research can be divided into four parts.The first part introduces the background, methods, ideas of the research and summary of some previous theories. This part includes the first 3 chapters. The first chapter mainly tells the technical ways, some innovation points and the ideas of the paper. Chapter 2 reviewed the debates of defination and gauge criterion of deflation, pointed some unreasonable results of the past researches. The real reason would be omitted if deflation were defined only by price index and not consider the issue of currency as some previous researches emphasized. Two external symbols, the actual currency and the price level can be used to broadly define the deflation. The currency essence of deflation will not been covered up under such scientific deflation defination. Such defination also tells the way to gauge the deflation. This paper discussed the reasons why deflation was intensified in 2001 according the selected ways. Some new issues after the active financal policies were implemented were the key fators, the paper pointed. The summary of some famous debt theories on chapter 3 was arranged as the process of the debate of Ricardian Equivalence Theorem, capital performance of national debt policy, risident consume effect of national debt policy and the performance researches ofnational debt in China. The opinions of Keynesian, Buchanan, J.E Meade, Lerner, Barro, Yuandong, Mashuanyou, were spercifically introduced in this chapter.There are two chapters in part 2; the reflections of different main eoconomy bodies were evaluated in this part after the implementation of active national debt policy, just as the response effect of capital, residencial consume and employment. The different parts of factual capital investment have different influence mechanisms to the development of economy, but normally their effects were evaluated as a whole. It is new tool that the effects of factual capital were differently analysed as the main bodies who invested. At beginning of chapter 4 the property of national debt was defined, the expending character of national debt policy is putting forward and the tax reducing character of national debt policy is shrinking in the period of def...