Mechanism Analysis And Empirical Test Of Monetary Expansion,Income Distribution And China’s Household Consumption Rate

The content of the 14 th Five-Year Plan and the government work report of the2021 Two Sessions highlighted the importance of promoting consumption in an all-round way to China’s economic development,but the current consumption rate of residents in my country has not reached the expected value.The reason for the decrease in the consumption rate of residents is the decrease in the share of labor income and the change in income distribution,which is related to the excessive investment of money.Whether monetary expansion has an impact on household consumption rate through income distribution becomes the research content of this paper.First,it makes a theoretical analysis of how monetary expansion affects the path of household consumption rate by affecting income distribution.This section is divided into two parts: the first part is about the mechanism analysis of the monetary expansion affecting the household consumption rate by affecting the income distribution;the second part is analyzing how the monetary expansion affects the household consumption rate by affecting the income distribution by constructing a mathematical model.Finally,three hypotheses to be tested are obtained.Secondly,it conducts an empirical analysis on how monetary expansion affects household consumption rate by affecting income distribution.First,measure the factor substitution elasticity of capital and labor.Taking 2012 as the boundary,we calculated the factor substitution elasticity of the two periods before and after,2000-2012 and2013-2019,respectively,and obtained the conclusion that the factor substitution elasticity was greater than 1,and there was a substitution relationship between capital and labor factors.Second,using my country’s provincial panel data,the difference method and fixed effect method reflecting short-term equilibrium and long-term steady state were used to test the empirical test results of the impact of monetary expansion and income distribution on the consumption rate of Chinese residents,and obtained that monetary expansion will change from In general,the household consumption rate will be reduced,and monetary expansion will also reduce the household consumption rate by reducing the ratio of labor and capital’s income share.Third,in order to ensure the robustness of the empirical results,on the one hand,two sub-regional samples in the central and eastern regions and the western region were used to repeat the test,and on the other hand,the variables were replaced and the sample period was adjusted to repeat the test,and the same conclusion was obtained.Fourth,according to the availability of data,select some countries,and use their panel data to repeat the test to prove that the conclusions of the article are also applicable to some countries in the world,and there is a certain generality and applicability,rather than the special situation in my country.Finally,make recommendations.Based on the conclusions of theoretical analysis and empirical testing,the paper proposes measures to alleviate the current situation,including: strengthening supervision,restraining the rapid rise of asset prices,reducing the imbalance of income distribution,and improving the transmission effect of monetary policy;precise use of monetary policy to strengthen expectations Management,starting from the short-term and long-term goals of economic development,adjust the cross-cycle of my country’s macro-control policies;increase the use of fiscal policy,reduce taxation on small,medium and micro enterprises and increase subsidies for low-income and other vulnerable groups;The way of directional control of monetary policy for enterprise development;to improve the consumption concept of residents.