The Economic Growth And Flucuation Of Monetary Variables In China

Since the marginal revolution, the neo-classical has dominated the mainstreamof economic theory circles. As we all know that the neo-classical theory is a doctrineand a method from the perspective of productivity to solve and explain and all kindsof problems in the real situation of economic and social life, which is a relative pricetheory based on the allocations of resources. There is no doubt that the thinking andthe method of the neo-classical doctrine is established and effective to explain thephenomenon and solve the problems in the field of microeconomics. However, theneo-classical theory cannot find out a way to the value the gross and cannot explainand reveal the relation among any gross. The powerless of the neo-classical theory inthe field of macroeconomics is because that the essential key to search this area is notthe production technology but the relation of production. All the index varibles in thenational income accounting system should be valued by monetary representation,which is quite different from the physical measured method of neo-classical docrien.Actually, we must find the key to understand and research the macroeconomicwhich is how the capitalist system runs, that’s the basic foundation to establish thenational economic accounting system and that generates all the index varibles. Thus,the relation of production is the most important point to look into the capitalistsystems, not the productive technology which is the prority point of neoclassicals toresearch and solve the macroeconomic questions. And then there will be full oflogical paradoxes and be lack of persuavice and explanatory power and the crebilityof the pratical problems. In the econmoc history, there are two noticeable capitalcontroversies which were rised by this issue. So the neo-classical economic theory istoo powerless to solve the questions in the macroeconomic area, the writer attempt tofind out a new way which is different from the neoclassic thinking to solve thisproblem.This article starts with two two capital controversies and comes along theKeynesian monetary economic thought, abandons the traditional neo-classical production function analysis, establishes a new analytical framework in which all thevariables were valued by money, this is a simple cost-benefit function what can makerelation amongs all the index varibles in the national accounting economic system.We conclude that all the variables in the macroeconomic such as total revenue, totaldemand and employment are determined by the running of monetary and financialsystem not the productive technology what is insisted by the neo-classical economists.In the monetary economic, the money supply is endogenous and all the indexvariables are parts of the monetary and finacial system and determined byasset-backed and the motive of the profit. In the macroeconomic, all the varibles needto maintain a stable ratio to make the national economic performance achieve tosteady growth. The writer took the china’s economic growth and volatility since thereform and opening up as the object of study in this theorical framework, and lookinto the economic structure to find out the core issue which is the effective demandproblem because of the imbalance economic structure.The paper is orgnazied as follow: the first chapter is the introduction in whichthe writer illustrates the meaning of the article, reviews the literatures. The secondchapter is the summary and sonclusion of the two capital controversy and thecriticisms of the neo-classical theory from several aspects and perspective. The thirdchapter is the reinterpretation of the Keynesian ideas, especiall his theory of themonetary economy. The forth chapter is to establish a new cost-benefit function and anew monetary framework, in which all the index variables are linked in the monetaryand financial systems. The fifth chapter is an empirical analysis of money supplyendogeneity conduction and.The sixth chapter is the research of the performance ofchina’s economy and then to look into the economic internal structure to find out thecore issue is that the effective problem by the imbalanced economic structure. Thelast chapter is the conclusion and the suggestion, the writer attempted to find a wayboth to keep the economic both to adjust the economic structure and to maintain ahigh level of economic growth.