The Total Demand Management Effectiveness Of China

The total demand management is the important and indispensable means of the state's macro regulation and control, the reason is that aggregate demand management at the national macro-control to achieve the primary objective of the role played by. State's macro-control is the primary objective of what? In fact, from experience, is the economic stability of macroeconomic policies and the traditional main goal. The period of economic overheating and excessive consumption of resources, then the "crunch period" idle resources will enable to achieve long-term economic growth and lower levels of social welfare, in addition to inflation and unemployment caused by inequality. Therefore, to reduce volatility and stable growth as the primary objective of macroeconomic regulation and control. Since classical macroeconomics, the overall economic fluctuations on the dispute have never been fully achieved consensus, but controversy has always built to a certain extent on the basis of consensus. Periodic fluctuations in the economy, whether due to economic, political or social reasons, are reduced to two categories of supply and demand shocks. Classical and neo-classical school of thought that the economic cycle fluctuations in the supply of stems from the impact of the government's macro-control policies of the time and unable to play a role in the economy in the long term, there is a mechanism for automatically balance. However, regardless of how long, modern life, people have been universally recognized, at least in the short term price rigidity in the memory, and indeed there is a demand shock, its possible consequences so that the government could not stand by and the need for aggregate demand management policies to control.Therefore, in a sense, to achieve the economic stability of the country's macro-control more directly belonging to short-term behavior, its means more demand from the start, with a total demand management naturally become its essential control means. Conversely, a country's total demand management effectiveness, the key lies in whether the reduced volatility, economic growth and stability play a role. The purpose of this paper is from the realization that the objectives of economic stability, since the reform and opening up of China's total demand management effectiveness. Empirical analysis model in the use of certain theoretical framework drawn on the basis of the total of China's further demand management policies, as well as macro-economic regulation and control as a whole has done some analysis, the corresponding recommendations.On the issue of China's total demand management system theoretically study the need for guidance and historical conditions in the summary. The first chapter in this paper first inspected the management of China's total demand for the relevant research results. Chinese scholars found on aggregate demand management study was divided into Keynesian demand theory to the main line of aggregate demand management studies and the total critical Keynesian demand management study. In specific research methods to standardize the description of the main comparative lack of empirical studies, the establishment of a complete quantitative model is scarce, and more historical data is summarized simply list data type. Here, the author or agree to the main line Keynesian demand theory of aggregate demand management study, the demand that the new management approach is actually Keynesian demand management theory of a development. In the preferred method of analysis and norms established empirical model of combining both contribute to the management of aggregate demand grasp the overall situation, but also their quantitative, and visual description. In understanding of the relevant research results on the basis of Chapter 1 of the second part of the management of China's total demand Evolution and the problems were analyzed. Here mainly on the basis of China's "five-year phase of" Project description of the associated norms, according to data received over the years since China's reform and opening up, economic growth in the broken line map, as compared with total demand management policies, the inspection interval related to economic stability, then our analysis the aggregate demand management issues: the market environment is not in place limiting the aggregate demand management policy role of the play; Transitional Period special economic situation could easily lead to the wrong aggregate demand management decision-making. First and Evidence, in the theoretical grasp the situation and concluded on the basis of simple exposition on the author's topics ideas, methods and tools. This raised an important analysis model: My two-stage IS-LM model. Choice IS-LM model: First, its correlation with other irreplaceable model of maturity and integrity, and the second is its simple and easily understood; choose to 1992 for the two phases of industry,⑴out of the economic cycle considerations. According to the economic growth of the broken line map, following the developed market economy countries in smoothing the economic cycle, microwave and the trend, China in the 1990s, especially since 1992 in the economic cycle also have such trends and characteristics, and past species dramatic ups and downs, great fluctuations peak and valley divide completely different trajectory;⑵1992 began the total demand of China's representative inflation.During his inspection tour of China's total demand management theory and the related subsequent evolution of the situation, the paper Chapters II and III integrity of the use of time-series data to establish the country's two-stage IS-LM model. The second chapter do is to model the relevant preparatory work, the model is set. The IS-LM model is the model mainly involve product market and the common currency market balance, here the author were done setting the relevant product market and the money market-related settings. Products in the statistical indicators: total consumption, with a total investment, net exports of goods and services, exchange rates, price index, the main function: Consumption Function, investment function, export function, import function and the exchange rate function. Money market mainly involves statistical indicators are: Money Supply, demand for the currency, interest rates, mainly involving the function is: money demand function. After the completion of the preparatory work, this is the third chapter of a two-stage model of the IS-LM established. The first is the selection of data from the Statistical Yearbook on access to information, such as the data are generally nominal quantity required in the establishment of model adopted Price Index will be converted into the actual measurement them, the author here selected price index for the GDP deflator, the abbreviation for D.fi. Formula for D.fi = GDPi IGDP1978 / IGDPi GDP1978. Because data for the selected time-series data that are easily non-stationary and auto-correlation, the authors used generalized difference method of data that, and in the establishment of the regression equation, the equation of cointegration test, are Cointegration, that equation effective. China successfully established in two phases after the IS-LM model, the paper's fourth chapter, in view of the specific model findings, the total demand of China's two-stage management policies had the effect of correlation analysis. First, China's total demand management policy role foundation exists. A model of the IS-LM number of variables, in addition to the relationship between imports and the exchange rate anomalies, the relationship between the exchange rate and interest rates weak, the other the relationship between the variables is basically normal, significant test of numerical and symbolic direction is relatively stable. China is still in the period of economic transition, institutional and industrial aspects There is a certain particularity, the present stage of China's macro-economic policies have high expectations effect it is not enough reality, but the policy is the basis of the normal role of existence and have the. Second, China in 1992 after the effects of aggregate demand management policies lowers than the previous stage. This is derived from the aggregate demand function is very easy to see. Effects of fiscal policy led to lower due to:⑴residents greater tendency marginal consumption decreased.⑵greater tendency marginal rise in imports. Which led to lower the effect of monetary policy is mainly policy reasons.⑶China's fiscal policy than the policy effects of monetary policy. This paper is relevant policies adopted to illustrate the multiplier comparison. Fiscal policy and monetary policy than the policy conclusion that the effect of China's 1996-2002 governance in a "soft landing" after the process of deflation has been proven. Finally, the model drawn by the author against the three management effectiveness of China's total demand for the conclusions so that the reader may have doubts, do a simple analysis.In analyzing China's reform and opening up since the after effects of aggregate demand management, the paper's Chapter V, at the present stage of China's total demand management made a number of policy recommendations, is the full text of the summary chapter. First, attention to the macroeconomic policy in economic development role; Second is to establish the role of macroeconomic policies and the economic base of three main demands is actively promoting balanced growth; four is a reasonable application of the monetary policy response inflation; finally, there is a certain degree, a demand management policies and supply management policies.The main innovation lies in: First, in normative and empirical analysis of a combination of analysis, a comprehensive analysis of China's reform and opening since the aggregate demand management effectiveness, the test results shall be the aggregate demand management policies on economic fluctuations Screed capacity. Second, according to China's 1978-2005 years of macroeconomic data to establish China's IS-LM model, and 1978-2005, with 1992 the sector is divided into two phases, established a two-stage IS-LM model, reached China monetary and fiscal policy effects double declining conclusions and the conclusions of the analysis done a corresponding explanation.