Study On The China's Deflation And Its Countermeasures

In recent years, with the insufficient demand and sustainable declining of price, deflation has become one big problem, which restrains the economy from healthily developing. To stimulate the domestic consumption and investment and curb the deflation effectively, the central government carries out in succession a series of active financial polices and monetary policies to stimulate domestic consumption and investment demand, and these policies are effective in expanding domestic demand and promote economic development. But most of the policies have not achieved the anticipated aims. Starting from the causes, which give birth to the deflation and the experiences and lessons while putting things in order, this article will provide some concrete measures to expand domestic demand.In Chapter one, the concept of deflation is chiefly introduced and classified, and its adverse effects are pointed out. In Chapter two, the theory of Keynes was applied to describe the deflation of the U.S. and Japan in great detail. Useful enlightenment is put forward. The adoption of active financial policies and strong monetary policies is an effective step to improve deflation. In Chapter three, our nation's deflation is expounded. To begin with, the concrete comports of our nation's deflation is introduced. In addition the causes of deflation is analyzed. The superficial reason for the deflation is the insufficient effective demand; the deep-seated reason for deflation is the economic system, economic policies and economic structure and etc. The sustainable deflation is not only caused by the self-enforcing system of deflation, but also by economic policies and economic structure. The increase of monoplistic products further deepens the deflation. In Chapter four, suggestions and policies are put forward. The essential method to improve deflation is to deepen the reform of economic system and make efforts to expand domestic demand. The main methods: to carry out the active and applicable financial and monetary policies continuously; to adjust the industrial structure; to employ domestic investment; to quicken the towns' construction; to perfect the social security system; to put in use the countryside market and to make use of consumptive loan; and industrialize the education.Postgraduate: Zhang Rui-lan Major: Agricultural Economic Management Supervisor: Prof. Li You-hua...