| Since the financial crisis in 2008,central bank has been deeply aware that a single monetary policy cannot achieve the desired objectives and need fiscal support.In 2008,China's central bank lowered the deposit reserve rate many times,but its effect is not significant.Therefore the government implemented the "four trillion" rescue plan to restrain the economic downturn in November of the same year.Since 2012,China's economy has entered a new normal periods,the government has adopted a positive fiscal policy and prudent monetary policy.Structural problems are still prominent,such as overcapacity,the economic downturn,low inflation and asset price bubbles.It is difficult to balance the multiple objectives that only relies on robust neutral monetary policy.Thus the status of fiscal policy in macroeconomic regulation has become increasingly highlighted.However,on one hand,the increasing fiscal deficit year by year means that China's government debt is also increasing,which is a hidden danger to economic growth in the long run.On the other hand,the attraction of currency target has been significantly reduced,due to financial market imperfections and other structural reasons,based solely on price policy regulation system cannot be achieved overnight.Therefore,what policies should be adopted to ease economic fluctuation has become a major theoretical problem and the real challenge that placed in front of the government and central bank.Based on that,this paper analyzed the macroeconomic effects of the fiscal and monetary policy in China,which gives the combination mechanism of fiscal and monetary policies can effectively regulate the real and virtual economy.Then,from the two dimensions of asset prices(real estate prices and stock price),we further analyze the combination of fiscal and monetary policy that can simultaneously suppress real economic fluctuations and virtual price fluctuations.Therefore,it provides the basic judgment and cognition for choice of fiscal policy,monetary policy tools and the combination of current mixed policy in the period of economic transition in China.Specifically,this paper is mainly divided into the following four parts:The first part is the introduction,mainly giving the significance and the background of the topic,theory review and literature review of the macroeconomic effect of fiscal policy,monetary policy and mixed policy.In the aspect of theory,this chapter mainly reviews the Keynesian and non-Keynesian effects,the crowding out and into effect of fiscal policy,the Ricardian equivalence theorem and the fiscal theory determined by the price level,the quantitative form and price form of monetary policy,and the policy combination rule under dynamic stochastic equilibrium.These lay the foundation for theoretical expansion and empirical analysis of the following chapters.In the aspect of literature,this chapter summarizes the effects of fiscal,monetary and policy combination on economic growth,inflation and asset prices,which gives the starting point and foothold of the following chapters.The second part is the second and third chapter,which mainly analyzes the macroeconomic effects of fiscal policy.Therefore,it provides theoretical support and empirical evidence for the orientation selection of fiscal policy in the current and future periods.Among them,the second chapter mainly studies the asymmetric characteristics of fiscal policy on GDP growth,inflation and stock price.The results show that: there is a significant regime-switching relationship among China's fiscal policy,economic growth,inflation and asset price,which means that the macroeconomic effects of fiscal policy depend on the different economic environment.Among them,the three fiscal instruments can suppress output and inflation fluctuations in most of the times,but the intensity of different periods is different.To point out,however,the regulation of three kinds of total fiscal policy on asset prices is unstable.It will appear to offset the positive and negative effects in many periods.Therefore,if you want to make effective control of asset prices by fiscal policy,the total amount is not steady.Instead,we should pay more attention to capital tax,labor tax,stamp duty and other kinds of taxes.The third chapter analyzes the influence of different tax rates and government spending changes to the output gap,inflation gap and asset price through DSGE models include the fiscal policy and asset prices.The main conclusions are as follows: China's fiscal policy has certain stability in regulating the economic growth,inflation and asset price.The short-term stimulus is more significant and the long-term returns to the rational range.In terms of fiscal expenditure,it can effectively stimulate economic growth and stabilize price level.As far as tax policy,the labor tax rate is the most effective fiscal tool to reduce the asset price fluctuation.While the consumption tax rate can effectively tame inflation,it has little effect on promoting economic growth.The capital tax rate can not only stimulate the economic growth,but also control asset prices and commodity prices,which can be used as an ideal tool of fiscal regulation.From the third part,this paper begins to study monetary policy.Among them,the fourth chapter analyzes the effectiveness of different intermediate targets of monetary policy.The results show that: in terms of the inflation,the nominal interest rate is a more effective policy tool.In terms of the economic growth,before the financial crisis in 2008,money supply is more useful,while after 2011 the effectiveness of the aggregate financing to the real economy increases significantly.Finally,at the asset price level,the nominal interest rate is better than the quantitative tools in stabilizing the asset price,which has gradually become the principal instrument of government and central bank to suppress asset price fluctuation.From the perspective of the different types of monetary policy rules,the fifth chapter explores comparatively the effects of quantitative,price and mixed monetary policy rules on the real economy and virtual economy by building DSGE model containing asset price.The results show that the mixed policy rule is applicable to suppress the different types of economic fluctuations,which means that the central bank should adopt the way of quantity and price combination to balance the asset price bubbles,inflation and real economic fluctuations.Based on the above analysis,this paper further explores the combination paradigm of fiscal and monetary policy,namely the fourth part of the article.Among them,the sixth chapter starts from the perspective of China's real estate price regulation,using the MS model to divide regime of combination of fiscal and monetary policy,which stripped out the Ricardo and non-Ricardo reaction equation of the monetary and fiscal policy.Then,this paper conducts a counterfactual simulation of the effect of the macro-economic policy regulation on house price under the two paradigms.The results show that China's macroeconomic policies obey the Ricardian mode in normal economic period,namely monetary policy leading macroeconomic regulation and fiscal policy maintaining the sustainability of government debt.But during the financial crisis,they obey the non-Ricardian mode,that is,fiscal policy controlling the price adjustment,giving up debt peg,and making up deficit by liquidity.In addition,the non-Ricardian paradigm,which fiscal policy leads to squeeze bubble and monetary policy assists to tighten the silver root,is more conducive to suppress real estate price fluctuations,and build a favorable economic environment for funds to take off the virtual to physical.The seventh chapter is mainly about the effectiveness of the combination of the fiscal policy and the mixed monetary policy.It is found that in terms of the inflation,the effect of mixed monetary policy is the best,fiscal tax revenue is second.In terms of economic growth and asset price,the regulation of mixed monetary policy is the most direct and fiscal expenditure rule is equally effective.Finally,in terms of fiscal and monetary policies dominance,the fiscal policy has a relatively weak interpretation of the output gap,the inflation gap and the asset price fluctuation(less than 5%).This means that at the present stage,China's macro-economic regulation is still mainly dominated by monetary policy,and fiscal policy is supplemented,which follows the Ricardian mode.To point out,however,using a single fiscal policy or monetary policy is difficult to achieve multiple objectives at present.Therefore,how to properly design combination of fiscal and monetary policy and to adapt to macro-control goals at different levels,it is still an important theoretical problem and practical challenge for the government and central bank in the future. |
PDF Full Text Request