Fictitious Economy, Institutional Evolution And Government Regulation

The economic crisis is the dramatic process of adjustment as a system after a serious imbalance in the structure of social reproduction of the economy. Structure is based on the accumulation of social reproduction, consumption structure as the core, the performance of real-time supply and demand as the external architecture. The essence of macroeconomic management is to achieve dynamic equilibrium on the structure of social reproduction. Under the conditions of market economy, macroeconomic management in general includes features to compensate for the functioning of markets and power failure, preventing the evolution of management systems, filling the limitations of management tools and instruments. Countering to physical impact, system evolution and fictitious expansion is the key of macro-economic management.New trends have emerged in modern economic development.This trend is the service industry orientation in the industrial economy and the fictitious orientation in the economic operation. The so-called fictitious economy is a system of liquidity which is the stock of social wealth, under certain institutional conditions, in money as a medium, running in the way of the capital and its derivative form. Its inherent nature is mobility that the wealth of society has obtained through fictitious orientation, socialization, capitalization and institutionalized. Expansion of the fictitious economy is the result of massive accumulation of social wealth, the financial system construction and economic globalization. The significance of the existence of fictitious economy determines the boundary of fictitious economy, which is a border of the function. But in reality, the alienation of fictitious economy's natural boundary often occurs beyond the borders of its functions, evolving from services for production to services for a living, Its source lies in that the nature of the mobility of the fictitious economy is highly dependent on system construction. System evolution created the alienation of fictitious economy's boundary.America's subprime crisis has highlighted the performance of the separation of fictitious economy and real economy. Its roots lie in the system evolution.Its deep-seated motivation lies in government's pursuit of its interests in games. This is due to the heterogeneity of market players, namely, the duality of the role of government. How to ensure government as market player's pursuit of self-interest does not affect government decision-making. It is the content of government regulation, to achieve consensus in the government and the public long-term, overall interests.China's current macro-economic logic is based on fictitious economy as the center, which includes "investment and financing" systems, industrial structure, accumulation structure, urban-rural structure and regional structure etc. The basic features of which lies with the government to act as the main body of investment and financing. "Government-led" has the meaning of the promotion of public capital formation in the early stages of urbanization, but when this task is completed, continue to strengthen the institutional structure, then the system function will change, many of problems of China's macro economy are rooted in this。China continued to strengthen the institutional structure, which deep-seated motivation lies in the interests of local governments' pursuit of GDP. In short, China's macroeconomic development model also exists in the problem of the system evolution. Its solution lies in government regulation, which is the lesson that the subprime crisis gives us on macroeconomic management.