How to use fiscal policy to control unemployment and inflation

1. Fiscal policy is the basic criterion formulated by the state to guide fiscal distribution activities and handle various fiscal distribution relations. It is a reflection of the will of the state in the objective financial distribution relationship. Under the conditions of a modern market economy, fiscal policy is also a tool for the state to intervene in the economy and achieve macroeconomic goals.

2. In order to achieve a certain economic goal, it is often impossible to use only one policy tool, and in order to achieve the optimal policy effect, various fiscal policy tools must be used together. How to coordinate policies is a crucial issue in policy decision-making. This coordination and coordination includes the use of various fiscal policy instruments, as well as the coordination of domestic and foreign policies.

Proper coordination and coordination of policies can better obtain the desired policy effect. Of course, there is a certain pattern to follow in this kind of coordination and cooperation, but more often than not, it is necessary to adapt to the specific situation.

**At this time, some subsidies will be given to many enterprises, which will reduce the unemployment rate, and the inflation rate will also be reduced, so that the economic balance can be maintained.

I think that the inflation rate should be maintained under the condition of ensuring that the unemployment rate is not **, so as to ensure the stability of the economy.

They should encourage the development of some enterprises, and they should regulate and control some prices, so that the development of the market will be relatively stable.

There are several policies to combat inflation and unemployment:

1.Monetary policy: control inflation by adjusting the amount of money, interest rates and other means. For example, banks can curb excessive monetary growth by raising interest rates and raising reserve ratios, thereby controlling inflation.

2.Fiscal policy: Fiscal policy includes two aspects: taxation and spending. When the economy is in a state of inflation, the scale of domestic demand can be reduced by raising taxes and reducing expenditures, so as to achieve the purpose of controlling inflation.

3.Employment policy: Solve the problem of unemployment by creating more jobs by promoting economic growth and optimizing the industrial structure. In addition, the competitiveness of the labor market can also be enhanced by training workers and improving the quality of the labor force.

4.**Control: Limit the price of prices or **intervention. Such interventions need to take into account the specificities of the market environment and cost-benefit analysis.

It should be noted that in the management of inflation and unemployment, we should not only use a single policy means, but should cooperate with these policies to form a reasonable policy system to achieve comprehensive results.

When the inflation rate.

When it rises, it generally leads to unemployment.

Decline! The most direct cause of inflation is the increase in the supply of coins, and when more money chases less goods, the price index rises. For example, four trillion in 2008.

The rise in prices has led to a decrease in the real income of fixed income earners (wage earners), but an increase in real income for those who earn mainly from profit (producers who own capital). For example, the house slaves and developers in the post-4 trillion housing market.

In this case, producers choose to expand production, so unemployment falls. For example, after the 4 trillion yuan investment, the infrastructure migrant worker tide, Guangdong labor shortage.

However, sharp or prolonged inflation can lead to overproduction, which can lead to an economic crisis.

Unemployment has risen sharply), this is the economic cycle.

Please business cycle curve). Such as the Asian Tigers in the 90s.

Economic crisis. Therefore, in order to protect employment (the most important thing is to avoid the economic crisis in the economic cycle)**, it is necessary to control the inflation rate: by maintaining inflation to extend the curve of the economy** (in 08 four trillion maintained GDP growth, increased employment, avoided the subprime mortgage crisis, and flattened the economic decline curve by controlling the inflation rate (after four trillion the implementation of the economic soft landing, to ensure employment).

PS: You now feel that high prices rose at the peak of the 11-year CPI** index (104-106), but now the CPI** index (101-103) is not as high as the omen.

If the general inflation rate rises, of course, within the right range, the economy will prosper and the unemployment rate will fall; But if it goes beyond that range, it will become hyperinflationary, and the economy will gradually go into recession and unemployment will rise.

When inflation is low, unemployment is high. There are two reasons for this:

1.When unemployment is high, wages are low, consumption levels are low, and prices are low2During the period of low inflation rate, it is often accompanied by the country's monetary tightening or monetary tightness, which leads to insufficient funds and poor production capacity of enterprises, and the unemployment rate is of course high.