Fiscal Policy Impact On Consumer Demand

Economic crisis spread to the world in the year of2008. Unfortunately, China has alsofailed to escape, many factories which located at the coastal city collapse, which impactedon the whole economy of china. Faced with such severe macroeconomic environment, ourgovernment appears promptly the corresponding action, including fiscal and monetarypolicy on economic; hoping to be able to reverse the situation of the economic downturn.For many years, our country’s economic growth mode has been kept the external demandprimarily, this destined to our country is difficult to escape by luck in this crisis, at thesame time makes us to realize the final power which the economic development needed isto develop domestic demand. But from the historical data and this study can see,consumption demand which belong to the domestic consumption has not kept up with thepace of economic development, the main reason is the contribution of the resident’sconsume decline in GDP, so residents consumption demand which is the source of theeconomic development is the research object in this paper. Fiscal policy and monetarypolicy in macroeconomic adjustments plays a dominant position, but the field that theyadjust is different, monetary policy is mainly regulates money circulation field by thecredit, interest rate method and so on, which will change monetary supply, the economictotal amount would promote social balance of supply and demand. And fiscal policyadjusts distribution and redistribution of national income by means of tax revenue, nationaldebt, financial expenditure and so on, which affect the economic structure. In conclusion,the fiscal policy will produce the larger and more direct influence on the residents’consumption demand, so this paper focused on the relationship between consumer’sdemand and financial expenditure structure, the ultimate goal is fiscal policy can moreeffectively promote the expansion of domestic demand. The content of this article includesthe introduction and five chapters; the first section (the instruction) describes the researchobject and research meaning. The content of the first chapter is simply introduced andsummarized domestic and foreign relevant literature research situation, extracting idea andresearch structure, highlighting the innovations and research deficiency. The secondchapter reviewed the theory which involved in this paper, including the financialexpenditure theory, financial expenditure structure theory and consumption theory, and allof them have been made detailed introduce. Chapter3, according to different classificationmethod, this paper introduces the structure of fiscal expenditure in our country and thechange of the consumption of the residents. And according to China’s urban and ruraleconomic structure characteristics, consumer groups are divided into two types. Finally, we draw a conclusion that the influences which belong to the same fiscal policy will bedifferent. The fourth chapter is the empirical analysis part in this paper. The fifth part willcombined the empirical analysis with theoretical analysis, then summarized the researchtarget of this article and give the policy Suggestions.