China s current fiscal and monetary policy coordination

The monetary policy objective is the ultimate goal of the monetary policy adopted by a country's ** bank or monetary authority.

Including: economic growth, ** level stability, full employment, interest rate stability, exchange rate stability, balance of payments. While central banks cannot directly serve these ends, they can formulate different policies for the variables it can influence.

There is often a conflict between the objectives of monetary policy, which can achieve one goal but also makes it more difficult to achieve the other.

In China, there are two propositions for the choice of monetary policy objectives: one is a single goal, with currency stability as the primary basic goal; The other is the dual goal of stabilizing the currency and developing the economy.

Judging from the historical evolution of the monetary policy of the leading banks of various countries, whether it is a single goal, a dual goal or multiple objectives, it cannot be separated from the economic and social environment at that time and the most prominent basic contradictions faced at that time. However, monetary policy should maintain sufficient stability and continuity, and the policy objectives should not be biased and changeable.

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Monetary policy is a variety of policies and measures for banks to use various tools to regulate the amount of money in order to achieve the set goals, and then affect the macroeconomic operation. It mainly includes credit policy and interest rate policy, shrinking credit and raising interest rates are "tight" monetary policies, which can suppress aggregate social demand, but restrict investment and short-term development, on the contrary, it is a "loose" monetary policy, which can expand aggregate social demand, which is beneficial to investment and short-term development, but is easy to cause an increase in the inflation rate. Fiscal policy includes the state's tax policy and fiscal expenditure policy, and tax increases and expenditure reductions are "tight" fiscal policies, which can reduce the total amount of social demand, but are not conducive to investment.

On the contrary, it is a "loose" fiscal policy, which is conducive to investment, but the expansion of total social demand is likely to lead to inflation.

Although these two policies have a strong ability to regulate in macroeconomic operations, it is difficult to fully achieve the macroeconomic regulation and control objectives by relying on one policy alone, and without the cooperation of both sides, the implementation effect of a single policy will be greatly weakened, which requires the two to coordinate with each other, cooperate closely, and give full play to their comprehensive advantages. There are four different combinations of fiscal policy and monetary policy, which one depends on the objective economic environment, in fact, it mainly depends on the judgment of the objective economic situation. In a nutshell, "one loosening and one tightening" is mainly to solve structural problems; The use of "double loose" or "double tight" alone is mainly to solve the total volume problem.

In the socialist market economy, monetary policy and fiscal policy are the two most important means of regulation for the state to perform its macroeconomic management functions; in the market economy on the basis of socialist public ownership, because of the overall economic objectives of the same and unified fundamental interests, the implementation of monetary policy and fiscal policy has a solid foundation, and at the same time, these two major policies have an inherent unity, which has laid a solid foundation for coordination and cooperation between them. However, since these two major policies also have their own special roles in China, and the focus of adjustment is also different, therefore, these two major policies are relatively independent, and the two cannot simply be equated or confused, nor can they go their own way, but should coordinate and cooperate closely with each other in order to achieve the goal of macroeconomic management.

1. The necessity of coordination between fiscal policy and monetary policy.

The necessity of coordination between fiscal policy and monetary policy is determined by the difference in the functions of fiscal policy and monetary policy.

1) The focus of policy objectives is different. Monetary policy is mainly to regulate the total supply and demand of money and solve the problem of inflation. Fiscal policy, on the other hand, focuses on addressing fiscal deficits and structural balances.

2) Transparency is different. The transparency of fiscal policy is high, and it is very clear whether the fiscal revenue is a surplus or a deficit. The transparency of bank credit is poor, and it is difficult to see the true status of bank credit balance and balance at once.

3) The time lag is different. The time lag for financial understanding is short, but the time lag for decision-making is long. Recognize that stagnation means that fiscal problems are easy to see, but decision-making takes time.

Monetary policy is a long time lag for understanding and a short time lag for decision-making. The long time lag refers to the fact that the formulation of monetary policy requires a transmission process and takes a long time, and the short time lag of decision-making refers to the fact that monetary policy is usually decided by the bank, as long as the understanding is clear, decisions can be made in a relatively short time.

4) Controllability is different. Fiscal policy can be achieved by direct control and regulation. Monetary policy usually needs to achieve the ultimate goal through the transmission of operational tools, which requires a transmission process, and there may be deviations from the ultimate goal.

2. The way in which fiscal policy and monetary policy are coordinated.

If fiscal policy and monetary policy are divided into three types: "loose", "medium" and "tight", then there are nine types of combinations between them:

Type of fiscal policy.

Type of monetary policy.

Loose, loose, tight, loose, medium, medium, tight, tight, loose, loose, tight, tight, loose, tight, tight

In practice, there are generally four modes of coordination between fiscal policy and monetary policy:

1. "Tight" fiscal policy and "tight" monetary policy.

2. "Loose" fiscal policy and "loose" monetary policy.

3. "Loose" fiscal policy and "tight" monetary policy.

4. "Tight" fiscal policy and "loose" monetary policy.

Answer]: C This question examines the economic stability function of the treasury. The combination of fiscal macro and deficit policy and monetary policy is mainly the policy of loose and tight coordination, such as loose fiscal policy and tight monetary policy, tight fiscal policy and loose monetary policy, etc.

Summary. Hello! Pro, the necessity of coordination between fiscal policy and monetary policy: fiscal policy and monetary policy are the two major means of macroeconomic regulation and control of the national economy, and there is both the possibility and necessity of cooperation between the two.

Hello! Pro, the necessity of coordination between fiscal policy and monetary policy: fiscal policy and monetary policy are the two major means of macroeconomic regulation and control of the national economy, and there is both the possibility and necessity of cooperation between the two.

The possibility of coordination between fiscal policy and monetary policy is reflected in the following: both are important components of the national economic monetary balance and expenditure system, and both are closely related to other monetary balance and expenditure systems in society; There is a close financial relationship between the two; The main body of operation of both is the state, and the ultimate goal is the same, and both are subordinate to the overall goal of the state in regulating the macroeconomy.

Fiscal policy and monetary policy are the two major tools of the macroeconomic regulation and control system, which play an important role in regulating macroeconomic operation, especially the aggregate demand and aggregate supply of society. In addition to strengthening coordination and linkage between fiscal policy and monetary policy, fiscal and monetary policies should also be coordinated with employment, industry, investment and other policies to form an integrated effect. All macroeconomic policies should be clenched into a fist and form a joint force, improve the accuracy and effectiveness of macroeconomic regulation and control, and escort the stable progress of China's economy.

Fiscal policy and monetary policy are the two major tools of the macroeconomic regulation and control system. ** The Economic Work Conference proposed that we should continue to implement a proactive fiscal policy and a prudent monetary policy, and that fiscal policy and monetary policy should be coordinated and linked. At present, China's economic development is facing the triple pressure of demand contraction, supply shock, and weakening expectations, and fiscal policy and monetary policy must further coordinate and form a joint force to more effectively stabilize the macroeconomy.

In economic policy, the measures and indicators of fiscal and monetary policies have attracted special attention. Both major policies play an important role in regulating macroeconomic operations, especially aggregate social demand and aggregate supply. At the same time, if there is a lack of coordination and cooperation, the implementation effect of a single policy will be greatly reduced, and it will be difficult to achieve the goal of macroeconomic regulation and control by relying on any policy alone.

In the process of innovating and improving macroeconomic regulation and control, China has always emphasized the coordination and cooperation between fiscal policy and monetary policy, and attached importance to giving full play to the effect of policy combination to improve accuracy and effectiveness.

**Debt management is an important area for the coordination and linkage of fiscal and monetary policies. In terms of local ** bond issuance, it is necessary to reasonably grasp the rhythm of special bond issuance, maintain reasonable and sufficient market liquidity, and ensure the smooth issuance of bonds. At the same time, we will guide financial institutions to strengthen financial services and ensure the reasonable financing needs of major projects.

The prevention and control of local debt risks, especially the prevention and resolution of local hidden debt risks, it is necessary to strengthen the supervision of local **, financial institutions and other entities, strictly block the "back door" of illegal debt financing, and control the financial "floodgate" of new project financing.