With Research, Fiscal And Monetary Policy Based On A Balanced Perspective

With the deep development of economic globalization and finance integration, the economic harassment that "Mead's Conflict" has brought to macro-economic controller is increasingly against being ignored. This has aroused a new cycle of innovative climax in the policy mix field after the research route of "Mead-Tinbergen-Mundell". But various researches have still not formed an orderly theory system for the key problem of "how to perform policy mix", which possesses both theoretical and practical significance. This has brought about some difficulties to the establishment and adjustment of policy mix in open economy.This thesis is indeed an attempt to solve these problems. Through the carding of theory system and the step-by-step discussion of policy mix necessity, effective policy mix existence and policy assignment in optimum policy decision under equilibrium angle of view, it attempts to broaden the boundary of traditional policy mix theory and concretely decomposes the key problem of "how to perform policy mix" into three steps: necessity evaluation, existence judgement and assignment rule confirmation, which provides theoretic help that has practical and operative significance for the establishment of policy mix.As the introduction of the thesis, chapter one introduces the problem, literature review, structure arrangement and probable innovations. Section one discusses research background, research objective, research subject and research method; section two synoptically reviews the foreign theoretical literature, foreign positive literature and domestic literature and carries out brief evaluation on the basis; the section three briefly introduces the thesis's structure arrangement and probable innovations based on the research thread.In light of the importance of equilibrium for the thesis's research on policy mix, chapter two starts from ascertaining the "economic connotation" and "non-economic connotation" of equilibrium thought and redefines equilibrium. The redefinition of equilibrium not only provides direct basis for the hierarchical division, index choice and data processing of internal and external equilibrium index system in chapter three, but also establishes thought foundation for the extension from existence analysis on effective policy mix to "Nash equilibrium" in chapter four. It also provides directive help to the transformation of policy assignment rule in policy mix analysis in chapter five. Therein, section one of this chapter concludes the "economic connotation" of equilibrium thought by the "cycle evolution" of equilibrium thought in the development of economics; section two jumps out of economics field and briefly abstracts the "non-economic connotation" of equilibrium thought; section three concretely redefines equilibrium on the basis of the previous two sections.Chapter three carries out research on the necessity of policy mix on the analysis basis of the equilibrium redefinition. Through retrospective summarization of traditional theories and their deficiency, this chapter locates the core of policy mix necessity on the lack of internal and external equilibrium. It provides tools for quantitive examination of policy mix necessity through building of internal and external equilibrium index system and applies these tools to Chinese reality. Therein, section one rediscusses where the core of policy mix necessity is through examination of three traditional theories of necessity. Section two builds an internal and external equilibrium index system which aims at evaluating policy mix necessity by directly making use of the equilibrium redefinition in the previous chapter. On the basis of section two, section three evaluate the policy mix necessity during 1978 and 2005 in China by using internal and external equilibrium index system. The result indicates that the internal and external equilibrium of China's economy is under the state of secondary disequilibrium in the long term, so the policy mix necessity exists for a long time. But the latest development trend displays that the Chinese economic reform brings about potential deterioration of external equilibrium in recent years while bringing about gradual improvement of internal equilibrium. Under the conflict between internal and external equilibrium, the extent of integral equilibrium falls to some degree, so that the policy mix necessity strengthens day by day. Meanwhile, the characteristic of equilibrium structure which is reflected in internal and external equilibrium index system and pre-alarm system also means that Chinese policy mix needs to place the same importance on external equilibrium as on internal equilibrium and needs to attach more importance to external equilibrium by using various policy instruments on the basis of guarantee of internal equilibrium even in the choice of policy mix in the future.Based on the premise of the existence of policy mix necessity, chapter four explores the existence of effective policy mix. Herein, section one comes up with the level classification of the connotation of effective policy mix, hackles the scattered theory system for the first time, and moreover summarizes and expects the theory development direction and theory research method; section two researches necessity condition of effective policy mix in both static and dynamic state on the basis of traditional Tinbergen Model and its expansion; based on section two, section three carries about important extension of the research field, introduces the multi-decision maker hypotheses and discusses existence condition in static and dynamic state by applying TT method and game theory method. Then, it combines four state analyses under united model frame and reaches the "restrained multi-instrument principle": For the sake of satisfying the need of enhancement of macro-economic control's control power, the quantity of policy decision-maker's all policy instruments needs to increase continually, and its gross exceeds the gross of policy target from moment to moment. Meanwhile, for the sake of satisfying the need of internal policy harmony, the quantity of single policy decision -maker's policy target should exceed his policy instrument. For the sake of reaching this double-binding condition of existence, policy decision-maker requires enriching the entire quantity of policy instrument on the one hand, and requires enlarging the policy target scope of its unit on the other hand. In this way, it is possible to satisfy concurrence of integral control ability and Nash equilibrium of game theory, namely the existence of effective policy mix in the full sense.On the basis of the analysis in previous chapter, chapter five studies the issue of policy assignment in the optimum policy mix decision, and attempts to offer the last-step answer to "how to perform policy mix": namely how to get and make use of policy mix principle though theory analysis of the optimum policy mix decision under the situation that existence condition is being satisfied in order to realize the "controllability" of economic system. Herein, section one hackles the theory system of policy assignment theory again and designates the extension direction of this chapter's research in the whole theory system on the basis of tracing back to the original purpose of "Mundell assignment rule"; Based on a simple dynamic open and small-country economic model known as "traditional Keynesianism pattern", section two successively introduces the "departure cost" and "adjustment cost" of policy instrument through orderly loosening model hypotheses, and carries out comparative analysis on the variation of policy assignment in the optimum policy mix decision under three situations; Based on section two, section three loosens the hypothesis for the last time, namely imports non-free capital flow hypothesis. It further improves the model in section two and discusses policy assignment under this situation. Through comparative analysis under different situations, this chapter gains the optimum policy assignment rule (double-way assignment rule) of an open and small country under the hypothesis of non-free capital flow and the existence of "departure cost" and "adjustment cost" of policy instrument. The rule argues that optimum policy mix should not be single-way policy assignment, but should be double-way policy assignment in open economy. Both fiscal policy and monetary policy are simultaneously pointed to internal equilibrium and external equilibrium, and both own determination of every kind of policy and corporative adjustment of integral policy mix are have direct connection with the form, degree and characteristic of internal and external equilibrium.Based on the analysis in previous chapters, chapter six discusses the reality of policy mix in China. Herein, on the basis of a VEC model, section one carries out positive analysis on the policy assignment pattern of Chinese policy mix from 1978 to 2005 by wielding Chinese evaluation data got from internal and external equilibrium index system in the course of Granger Causality Test, Impulse Response Function and Variance Decomposition; Section two concretely elaborates the content of Chinese policy mix within sample spacing in section one and orderly summarizes the history and actuality in the dynamic evolution of Chinese policy mix; on the basis of previous two sections, section three analyzes the background and tendency of Chinese policy mix during the 11th Five-Year Plan period, and comes up with this thesis's policy suggestions: the first suggestion is that policy decision-maker should practically review Chinese policy mix necessity in each period by using evaluation result of internal and external equilibrium index system according to redefined equilibrium connotation. The second suggestion is that policy decision-maker should pay attention to game equilibrium in policy mix decentralization and carries out choice of policy target and policy instrument and improvement of allocation mechanism by "restrained multi-instrument principle". The third suggestion is that policy decision-maker should finish the transformation from "Mundell assignment rule" to "double-way assignment rule" in the respect of assignment rule.