Application Of The Balanced Growth Model In Economic Analysis

For a long time, urban and rural disparity, regional disparity, income gap, people's serious destruction to environment, are coexisting with the high-level economic growth in China. The scene can't be "understood" by a great deal of economic scholars and be difficult to explain by contemporary economics theory. The first task in front of economics people is to explain how the present situation appears, another task is "how do", that is to say, after finding the reason, the resolution should be provided.This thesis combines the economics theory and national economic analysis means, proposes the monetary principle in economical operation, and the equilibrium growth model including the funds and material flows. Based on economic reality, analyzes, explains China's economy, then extrapolates the relevant income distribution parameters and growth parameters of China's economy, offers references for the economic policies. The main contents are as follows:First of all, this thesis introduces the income distribution situation present in China and relevant positive research, which have basically reflected main views and research approaches in this field. The relevant theories of reviewing classical political economy are appraised, such as general equilibrium theory, Marx produce formula, Keynes'theory of income distribution and economic growth, income distribution theory of the new school of Cambridge, and the exposition about the monetary analytical method of material object in contemporary western economics,etc. From the trains of both time and logic, reviews the development of monetary thought, income distribution thought, economic growth thought, the balanced economy thought, the material object economy thought etc. After reviewing the economic theory, this thesis has made an introduction to the economic analysis tools under the guidance of the theories, mainly the fund flow analysis in national economy and general equilibrium CGE model.The main theory innovation of this thesis is lighted and divided into two parts:Part 1 is "monetary principle", studing how the national monetary issuing mechanism operates, how each main body in the society issues or gets the money to form the purchasing power in conformity with real economy. There are three respects. It states history of the federal reserve bank of U.S.A at first, which make readers know about the historical course of the system of Central Bank; Secondly explains the relations between Central Bank and government, monetary policy cooperation of financial policy including issue of money, treatment of national debt, open market business,etc. Third, analyzes the money expanding by commercial banks, gets the new view on the rate of the bank reserves, puts forward separate fund, independent fund, unused separate fund and unused independent fund, so as to dissects influence between the economy and money. At the same time, the chapter, has proved the monetary identity, and finishes the analysis of the funds supply-demand relationship, monetary controlling by commercial banks and Central Bank under the monetary identity frame. In fact the monetary identity provides the both endogenous and external mathematics relation.Part 2 is about "the equilibrium growth models". It studies the problem that what kind of monetary purchasing power distribution suits process of the production, distribution, exchanging and consumption, in order to handle income allocation in economic growth. In other words, it deals with "equilibrium of supply and demand of capital category", "equilibrium of supply and demand of consumption category", and "the transformation from capital category to consumption category (for any capital product should be all turned into the consumer goods finally so that the profits be confirmed) ".The data analysises of the innovation theory are as follows:On the basis of the innovative theory, with 12 years'data of China, the thesis has carried on the data verification, provided analysis conclusion and policy recommendations of China's economy. Thesis covers most macroscopical data of statistical yearbook, combines more than ten kind of separated statistical data in one equilibrium growth model, which contains the fund flows, fund allocations, imports and exports, price-level changes, economic growth, investment and consumption, fixed assets, input and output,etc. The equilibrium growth model provides various economic factors which including monetary and material reasons, and these reasons explain the economic fluctuation since 1992 in China well, such as inflation, deflation, monetary expansion, etc. On the foundation of data analysis, the thesis expand further the long time and short time analysis of the model, and combines technological progress, industry chains, economic equilibrium and economic growth together, in order to imitate the relevant fluctuations of realistic economy, provide the policy recommendations.From the monetary principle and the equilibrium growth model, and combining foreign practical policies such as negative income tax, the thesis puts forward the view in China's social security system, labor policy, imports and exports policy, technology policy, points out that raising consumption proportion, developing the domestic industry, reducing the foreign trade dependence degree, raising R&D fee all do well to the economic equilibrium growth in China. Also, the paper gives the concrete suggestions for operation. At the end of the paper, the standardized forms of the equilibrium growth model are put forwards, which makes the analysis simple, clear and standardized.