General Analysis On The Matching Effect Of China's Fiscal Policy And Monetary Policy In The Latest Years

This Essay, starting with the differences and connections between the Fiscal Policy and Monetary Policy, demonstrates the need for the matching between the two policies. Judging from the positive fiscal and monetary policies adopted by China's authorities since 1997 and their actual effects, applying with experimental methods, the author found that the matching effect of the two policies was not ideal in the past years. Based on the findings, the author further analyses on the two micro-economic foundations (State-owned conmxercial banks and State-owned enterprises) and the market environment for the policy effectiveness?(Market-driven finance system, Finance system and Fiscal system), obtains the reasons that constrain China from entering into a real market finance system; concludes that China is in need of micro-economic entities and market environment for the effectiveness of the two policies. Finally, the author puts forward with suggestions on how reasonable economic persons should be setup, and how the finance and fiscal systems should be reformed in order to solve the existing micro-economic foundation problems relative to the effectiveness. The conclusion is that, under current circumstances, the joint point of the matching effect between the fiscal and monetary policies is fiscal investment, financing and treasury bond.