Joke Collection Website - Mood Talk - This paper discusses how to control inflation from two aspects: fiscal policy and monetary policy (tightening policy to curb inflation), and makes a graphic analysis.
This paper discusses how to control inflation from two aspects: fiscal policy and monetary policy (tightening policy to curb inflation), and makes a graphic analysis.
When the effect of raising the deposit reserve ratio several times is not obvious, we should focus on using interest rate means; We should consider changing the structure of fiscal policy,
Reduce investment in capital construction projects, strengthen support for structural adjustment and social undertakings, and further increase investment in agriculture.
This round of inflation is mainly caused by excess liquidity under the pressure of RMB appreciation.
Inflation is ultimately a monetary phenomenon. Generally speaking, when the currency in economic operation exceeds the currency needed for normal economic operation, the price level will rise. Excess liquidity is the monetary environment formed by inflation. If the liquidity greatly exceeds the actual money demand, the future inflation situation will be inevitable.
The imbalance of international payments is the deep-seated reason for this round of excess liquidity and inflation. In recent years, with the influx of foreign capital and the rising trade surplus, China's foreign exchange reserves have been increasing, which makes the RMB face great appreciation pressure. Under the goal of stabilizing the RMB exchange rate and avoiding the excessive appreciation of RMB, the base currency of RMB is forced to expand rapidly. The increase of the base currency acts on the economy through the multiplier effect, which makes the liquidity continue to rise, thus pushing up the price and bringing about the revaluation of assets such as stocks and real estate.
This round of inflation is the result of demand-driven and cost-driven.
After the global financial crisis broke out, China adopted a 4 trillion yuan investment plan to expand domestic demand, which greatly stimulated domestic investment demand, thus increasing the demand for raw materials and energy such as steel, cement, oil and rubber. At the same time, the international prices of bulk raw materials have risen sharply, which has increased inflationary pressure.
As far as the prices of agricultural products (10.33, -0. 17,-1.62%) which have risen most obviously in this round of inflation are concerned, the reasons are relatively complicated. There are not only reasons for the sharp increase of residents' consumption of high-quality grain varieties in recent years, but also factors such as the rigid increase of production materials, labor force and land prices. From the perspective of supply, some agricultural products such as cotton, beans and corn decreased production last year, but since the beginning of the year, bad weather such as low temperature in the north and floods in the south have appeared one after another, reducing the supply of agricultural products. In addition, after the funds were withdrawn from the property market and energy-intensive industries, they turned to speculate on some agricultural products that are easy to store, with few varieties and relatively concentrated output, which pushed up the prices of agricultural products.
This round of inflation is driven by asset revaluation and credit expansion.
Bank credit played a key role in this round of inflation. Due to the profit model of China's banking industry, which is mainly spread, excess liquidity brings high lending enthusiasm to the banking system. The revaluation and rise of real estate and other assets have greatly enhanced the ability of enterprises to carry out mortgage financing and promoted the expansion of bank credit, which will further aggravate speculative demand and push up the prices of stocks and real estate, forming a pattern in which asset price rise and bank credit expansion promote each other.
Monetary policy plays a major role in controlling inflation, and fiscal policy cannot be ignored.
Since inflation is a monetary phenomenon, monetary policy should play a major role in controlling inflation. At present, the policy measures to raise the deposit reserve ratio for many times are not effective, so we should pay attention to the use of interest rate measures, that is, raising interest rates as the main policy measures to curb money demand, thus reducing the inflation rate. Strengthen the coordination of interest rate and exchange rate policies and maintain the basic stability of RMB exchange rate at a reasonable and balanced level. At the same time, actively open market operations, and strive to hedge the passive base money brought about by foreign exchange holdings.
The role of fiscal policy in curbing inflation cannot be ignored and must be carefully designed. First, consider changing the financial policy structure, reducing investment in capital construction projects, strengthening support for structural adjustment and social undertakings, especially increasing subsidies for medical care and education in the central and western regions. Finance at all levels should further increase investment in agriculture and earnestly implement various policies to support agriculture and benefit farmers. The other is to implement the policy of "overall growth, increasing or decreasing structure" in the tax reform, and to rationalize the cost-profit mechanism of enterprises as the core, and to levy resources tax, environmental protection tax and other taxes in a timely manner.
Straighten out the price mechanism and promote the optimization of industrial structure
In view of structural inflation, we should speed up the adjustment of industrial structure and promote the balance of economic development. Continue to strengthen the basic position of agriculture, solve the problem of food supply based on the domestic situation, promote farmers to increase the production of food and major non-staple foods such as meat, poultry, eggs and milk, and maintain the basic stability of food prices; For the price market of agricultural products and other necessities, the government should proceed from the overall situation of increasing agricultural income, improving farmers' consumption power and maintaining food security, appropriately raise the purchase price of major agricultural products, severely crack down on illegal hoarding and speculation, establish a relatively perfect agricultural product purchase and reserve system, and ensure adequate food supply and standardized market.
The writer is the director and professor of the Institute of Economics of South China Normal University.
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