| Deflation has impeded China's economic development for last several years. According to this year's macroeconomic analysis, deflation seemed to be under control. But the deflation expectation, as an independent phenomenon, is getting worse at various fields because of its continuity and inertia. Once such expectation exists, the investment and consumption level of an economy would be greatly affected. Thus we must demolish such expectation before we can totally reverse deflation. We have a short history of deflation. Therefore, our economists have much less research on deflation and deflation expectation than on inflation. Thus the research on the effect deflation expectation may have on macro economy would probably enlarge China's theoretic research scope on such problem. Meanwhile, we can also verify weather the debt-deflation theory and the theory of Paul krugman are suitable for our situation? It is the usual way to attribute deflation and deflation expectation to external factors instead of system reform. Therefore, it is necessary to find the specific causes of deflation theoretically. Practically, only if we clarify the specific causes of deflation expectation, can we demolish deflation expectation effectively. Can we reverse deflation. Can we guide rational consumption to enlarge domestic demand .can we augment investment to propel china's economic development and amplify government's macroeconomic policy and improve its macroeconomic control. Since it is of great theoretical and practical importance to point out the causes and features of deflation expectation, the aim of this thesis is to find the basic causes, features of deflation expectation and its effect on consumption, investment and government macroeconomic policies. And give related politic suggestions based on the above. First of all, this thesis gives several definitions of deflation expectation: economic unit expect for current deflation trend based on given theory and information, including consumer's uncertainty expectation and deflation expectation in producing and circulation field. The fundamental cause of consumer's uncertaintyexpectation is the economic system reform. The government is not able to afford the whole security expenditure because of the low efficiency of state owned enterprise. And the expected expenditure increased. The reform of economic system is reaching to the core part and made a loss to someone's short-run benefit, the systematic feature of which let the people can't predict its progress correctly. Thus everyone worried that the reform would affect his benefit and expects the income risk would increase, then consumer deflation expectation comes into being. And same deflation expectation exists in producing and circulation field. There are three feature of deflation expectation which are rationality, stickiness, countermeasure. I analysis carefully the effect of deflation expectation of consumption and investment, pointing out the reason then state that government macroeconomic policy can't acquire the expected aim for the effect of deflation expectation. At the end of this thesis, I introduce several policy suggestions. Chapter 1 states that this thesis is written under the background of current deflation, pointing out its theoretic and practical importance. The aim of this thesis is to illustrate the effect of deflation expectation on macroeconomic operation and submit related policies. Last is the fundamental framework, logic structure and research method. Chapter 2 introduces Irving Fisher's "debt-deflation theory, which reveals when large debt in an economy accumulate to certain lever, it would induce deflation. Then there are two points of Paul Krugman. One is that the pressure deflation is structural essentially. The real equilibrium interest rate is positive; even if the nominal interest rate close to 0, insufficient employment would continue and economy would slide into deflation. The other point is that though the deflation is a danger, the cause of such danger is... |
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