The Research Of Application Of Time Inconsistency To Economic Policy-making

The reform of china is the process that the planned economy transformsinto the market economy, in which the economic policy gives government auseful tool to allocate the resource .In already past more than 20 years, thegovernment made a lot use of economic policy to adjust economy. There arenot only success experiences but also defeat lessons. But all of them shouldbe well regarded. In the economic domain,more and more people payattention to the micro-behavior foundation for macro-economy. Behavioralmacroeconomics has made the best summary that macro-economy is aconfluence of individual behavior. The theory of the time inconsistency founda new model for the economic policy research. In here, whether the economicpolicy has time consistency often suggests whether this policy is effective.This article attempts to explain different types of time inconsistency byexploiting the time inconsistency of part of the economic facts. Possiblesolutions are suggested then to solve the problem of time inconsistency.These facts involve the circular economy, the finance and monetary policy,the closure of small refineries and the cartel in oil industry.