Fiscal and Monetary policy.pptVIP

Fiscal Policy and Monetary Policy Fiscal Policy Refers to the government’s use of its annual budget年度预算 to achieve the government’s objectives政府目标: balanced economic growth, low unemployment rate, low and steady inflation rate, balanced balance of payment经济的稳定増长，低失业率，低的稳定的通货膨胀率，收支平衡 Functions of fiscal policy:作用 Redistributional重新分配 (to ensure income distribution) Allocation 分配(to ensure effective resource allocation有效的资源分配) Stability 平衡，稳定(to reduce fluctuations波动 of economic cycle) Institution制定: government Types of fiscal policy Neutral - balanced budget G = T (Government spending = Tax revenue) Expansionary扩张性的,膨胀的；扩大性 – net increase in government spending, rise in government spending or fall in taxation revenue or a combination of the two Budget deficit预算赤字 Smaller budget surplus更少的预算盈余 Contractionary 紧缩– higher taxation revenue or reduced government spending or combination of the two Lower budget deficit低的预算赤字 Larger surplus 大的预算盈余 Tools of fiscal policy Automatic stabilizers自动稳定装置 – after setting automatic impact on economy Mandatory (obligatory) spending义务花费 Progressive进步的 income tax Transfer payments 转移性支付(e.g. unemployment compensation失业补偿金) Discretional任意的 measures – one-shot measures to realize changes in economy Changes in tax rates or establishing of new taxes Changes in items项目 of government spending Changes in structure结构 of government spending Public programmes方案 and projects of employment Structure of budget deficit Cyclical deficit 周期赤字= passive被动 deficit, consequence of economic cycle in the period of recession衰退, consequence of the function of automatic stabilizers Structural deficit机构赤字 = active deficit, consequence of government spending increase or tax decrease, reasons: Expansionary fiscal policy扩张性的财政政策 Government populism平民主义 Desintegration of tax charge etc. Real budget deficit 实际预算赤字= cyclical + structural deficit Theoretical approaches to fiscal policy理论上接近财政政策 Keynesian school dominant role主要角色 of fiscal policy when affecting econ