Research On Coordination Of Fiscal And Monetary Policies Based On Imbalance Of Domestic Demand Structure In China

Coordination of fiscal and monetary policies, as important tools of government macro- control, effect national economy directly. Normal macro-economy operating greater partly depends on fiscal and monetary policies, which are correctly carried out and coordinated for greatest combining power. Both fiscal policy and monetary policy submit to the general goal of macro-control, and the relationship between them is very close. However, they cannot be substituted by each other in the macro-control because of their characteristics and differences. There are many different combination patterns for fiscal and monetary policies in different economy situations, which will have different influences to the economy. However, both of two policies must be combined effectively in order to playing the important role in the macro-control.For a long time, domestic demand structure is always imbalance in china, that high investment rate and low consumption rate is mainly form of expression. Investment becomes the important power to motive economy increasing, while consumption insufficiently contributes for economy increasing. Investment cannot become the real and lasting power for economy developing. New productive forces generated by investment will set aside because of consumption lack. Nether economy increasing promoted by investment nor investment increasing itself can be sustained. So imbalance of domestic demand structure challenges to coordination of fiscal and monetary policies. Fiscal and monetary policies should focus on optimizing domestic demand and enlarging consumption. In the past ten years, effects that fiscal and monetary policies adjust the structure of domestic demand are not obvious. Moreover, econometric analysis indicates that fiscal and monetary policies have important influence on investment more than consumption. It means that policies cannot promote consumption increasing, generate crowing-effect for social investment. So coordination of fiscal and monetary policies should be strengthened. Shortages of fiscal and monetary policies are inner factors that have influence on fiscal and monetary policies'effects. Problems, including policies establishment, tools choice, policies intensity and policies combination, limit fiscal and monetary policies'effects. System problems are outer factors as well as. And system factors leading to domestic demand structure imbalance much more exceed policies'shortages, so it is more difficult for fiscal and monetary policies to control and adjust. Fiscal and monetary policies should think more of consumption than investment, because excessive investment leads to economy fluctuation and consumption decides economic increasing. When coordination framework of fiscal and monetary policies is built up, the goal of fiscal and monetary policies should focus on optimizing domestic demand structure, that means increasing consumption and decreasing investment, and making proportion between them correct. Now economic increase speed is reducing and investment plays more important role in the economy increasing, so increasing consumption cannot be based on decreasing investment scale. Otherwise economy may be depressed further, which should be avoided in macro-control. So improving investment efficiency should be considered when making fiscal and monetary policies, and increasing investment efficiency should combine with increasing consumption in order to getting reasonable domestic demand structure. When adjusting domestic demand structure, fiscal policy should be used and taken advantage of its structure adjustment function. And"micro-"policies should be measured, that determined by domestic demand structure's characteristics and mechanism. Policies combination should be made neatly. In a short, fiscal and monetary policies must be measured with increasing investment efficiency and stimulating consumption.