Choice Of The Path Of Fiscal And Monetary Policy Coordination

There are two primary means to regulate and intervene in macro-economic operation: fiscal policy and monetary policy, Taken with the consistency of control objectives and control areas, but functional differences. In order to improve their effect on macro economy, they should go along with each other. It can be said that a country's macro-economic operation is normal, or problems in economic operation can be smoothly and efficiently corrected or not, is largely determined by whether the correct formulation or implementation of fiscal and monetary policy, the effective coordination of use two policies.However, two major policy coordination of research and analysis should not be limited to the economic aggregate level; In fact, they have the role of structural adjustment. Following the expansion of the total economic output, more serious imbalance in the structure of domestic demand are hidden behind, which is focus on performance for the high investment and low consumption imbalance in the ratio, brings the hidden danger for the economical sustained development, and intensified the economical fluctuation risk. For this reason, it is need to optimize the two main policy coordination, and to fundamentally solve the structural imbalance in the state of domestic demand.This article precisely studies two main policies coordination paths based on the domestic demand structural adjustment angle of view. For a clearer understanding of issues, this paper embarks from the theoretical basis, and use IS-LM model to analysis two main policies and domestic demand structural adjustment relations. Through recalling the history of 1978-2006 years of the coordination of fiscal and monetary policies in the empirical analysis of relevant data, and evaluating the effect of the implementation of the coordination between the two major policies, point out two major policy coordination problems still exist. Then following questions-asking, question-anglicizing and problem-solving ideas, draw conclusions, which are pointing to the reasonableness of a moderate fiscal policy and tightening monetary policy, and proposing coordination of the specific suggestions.