Research On Coordination Of Fiscal And Monetary Policies

In today's world economy macro-control plays a pivotal role, and has become a important means for remeding defects of market regulations and promoting economic steady and continuous development. Fiscal and monetary policies are tow of the most important regulation and control methods.Appropriately formulating and implementing fiscal and monetary policies, making them cooperate effectively and form a- cohesive force has the important effect on normal operations of the macro-control of economy.Facing the complex economic environments, how to use fiscal and monetary policies more effectively, is an urgent and practical problem for academic circles and government departments.Our economy is undergoing development and is the important period of reforms and transformations. Healthy development of the national economy is closely linked with national macro-control effects. And effects of macro-control depends on whether the fiscal and monetary policies can appropriately cooperate and used. The government with a good ability to control the market economy, can make fiscal and monetary policies flexibly to act on the macroeconomic goals in different economic situations according to the characteristics of two policies. If the fiscal and monetary policies cooperate inappropriately, there may be contradictory and mutual offseting effects.Base on the mportant theoretical and practical significance of fiscal and monetary policies' mutual coordination to macro-control, this paper will make a comprehensively and deeply study on coordinations of the two policies as well as China's policies' practice. There are six parts in this paper.In the first part we summarized the theoretical basis of fiscal and monetary policy coordinations for main schools of western economics. Through the analysis of their respective fiscal policy and monetary policies of major schools of western economics, summarized the cooperate thoughts of the fiscal policy and monetary policies from their economic theories.In the second part respective characteristics and differences of fiscal policy and monetary policy were introduced. The characteristics and differences between two policies mainly embodies in seven aspects including the policy regulation subject, policy functions, regulation and control methods, policy delay, policy constraints, flexibility and regulation tools. In the third part we analysed coordination effects of two main policies in the IS-LM model framework. Based on the influential factors of IS and LM curves, analyzed the policy effects and the reasons of different IS and LM curres.In the fourth part the combination modes of the fiscal and monetary policies were classified. Separately in the totals and contents, and made the concrete policies combination analysis in totals.In the fifth part we made reviews and comments to coordination practices of the two main policies since the reforms and openings in China. We can see, along with the increasing of our country economy opening degrees, monetary and fiscal policies played more important roles in the economic regulations.In the sixth part we mainly put forward policy suggestions for improvements of fiscal and monetary policy coordinations in six aspects.