The Coordination Of Fiscal Policy And Monetary Policy In The View Of Excess Liquidity Research

Since the start of 2004,China's economy is in the case of local overheating;at the end of the year in 2006,showing a trend of excess liquidity.Excess liquidity has gained the opportunities for economic reform,but to the economy it has resulted in serious harm.it brings the rapid growth of fixed asset investment,bad impact on the effectiveness of monetary policy to play,and more difficulties of macro-economic control policies and so on.In this paper,we will research from early 2004 to September 2008,in this nearly 5 years,how to against the backdrop of excess liquidity from the view of the coordination fiscal policy and monetary policy.Excess liquidity in China's economic development process reflects a variety of conflicting.The reasons in the domestic point of view,are from the loose policies before 2004,increasing foreign exchange reserves,and a serious imbalance in the economic structure,etc.Many Chinese scholars from a current monetary policy or fiscal policy point of view researching excess liquidity,such as the causes of the problem have been studied and discussed,and on this basis put forward their own policy recommendations.However Excess liquidity in the real economic situation,China should implement tight monetary policies and the expansion of fiscal policy.Theoretically,tight monetary-loose fiscal of this co-ordination is effective,because the tighter monetary policy could curb inflation,and the expansion of fiscal policy can change the economic imbalances.However,we should also see a deeper level of excess liquidity caused by the root,the imbalance of economic structure and thus lead to inadequate consumption,so relying solely on monetary policy or fiscal policy can not solve the fundamental economic performance in the problem of excess liquidity:Only monetary policy and fiscal policy co-ordination,multiple exploration of monetary and fiscal policies in different ways and paths and innovative combination of the two points is a fundamental and inevitable choice.In this paper,based on the process of China's economic situation,first of all,we introduced the fiscal policy and the coordination of monetary policy in theory,and then researched the excess of liquidity for general analysis,including the concept of mobility as defined in excess liquidity, as well as the causes of excess liquidity for the impact of macro-economy, etc.And after that based on China's monetary policy and fiscal policy coordination policies we studied the background of excess liquidity on financial policy and monetary policy point.Finally,we introduced the two policy co-ordination with the policy proposals.Analyzing in the fiscal policy and monetary policy point,the mobility of bonds is in an active role in governance.Including the adjustment of debt maturity structure of the species,as well as to broaden the financial investment and financing,and to guide the society in urgent need of idle funds into the development of industries and sectors,so finally in order to resolve the problem of current imbalance among the economic structure and also the problem of excess liquidity and more to provide an effective policy advice for the period of reference similar economic cycle.