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Liu, Wei
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[Journal:] China Finance and Economic Review [ISSN:] 2196-5633 [Volume:] 2 [Year:] 2014 [Issue:] 1 [Pages:] 1-12
Currently, China's expansionary fiscal policy and tight monetary policy have formed an opposing policy mix. This is due to the imbalanced macro-economy, which suffers from the pressures of inflation and slow growth. In response to economic changes, China adjusted its monetary policy as the real economy has a weak demand for money. In its reactions to the financial crisis, China adopted a series of policies different from those implemented in European and American countries. For this mix of opposing fiscal and monetary policies to be effective, three conditions should be met: the adjustment of direction should fit the real imbalanced economic situation, financing and investing mechanisms should be market-based, interest rates and exchange rates should gradually become market-determined.
Fiscal policy
Monetary policy
Mix of easing and tight policy
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