The Impact Of Fiscal Policy And Monetary Policy On The Industry Pay Levels

China's macroeconomic policies, especially fiscal and monetary policy which have long been inclined to economic growth while ignoring income distribution, have become one of the major factors contributing to widening salary gap between industries. Given industrial and geographical factors behind pay differentials, the paper chose to study relationships among fiscal policy, monetary policy and pay levels of four representative industries in two provinces based on VAR models. The study concluded that macroeconomic policies in Sichuan Province should be more cautious; Macroeconomic policy should shift its focus from quantity-oriented economic growth to quality-oriented economic growth and it was also necessary to accelerate the reform of substantial income distribution policy. In addition, inspired by the features of CAPM, the paper built an innovative model for studying an inter-industry salary formation mechanism in long-term market equilibrium.