Fiscal policy and monetary policy are the most important and commonly used macroeconomic policies of the country, which serve macroeconomic goals such as economic growth, price stability, full employment and international balance of payments.
Both of them are measured by the economic aggregate in monetary form, so both fiscal policy and monetary policy have distinct characteristics of aggregate policy, which is the * * * side of the two policies.
The difference between fiscal policy and monetary policy;
First, the main body of policy implementation is different.
The theme of fiscal policy-* * *
The main body of monetary policy is the central bank.
1. In most developing countries and some developed countries, the central bank is a subordinate institution of * * * *, and it is only a nominal subject of monetary policy, so it cannot independently implement monetary policy. Due to the advantages and disadvantages of this model, countries adopting the above model are constantly taking improvement measures to gradually strengthen the independence and authority of the central bank.
2. In many economically developed countries, the central bank has a high degree of independence from the * * * department, and is directly responsible to the legislature or the president when formulating and implementing monetary policy, and * * * has no right to control the operation of monetary policy. In this case, the central bank really becomes the main body of monetary policy, which is very beneficial to maintaining the authority and implementation effect of monetary policy.
Second, the difference of conduction process.
In order to achieve the goal of monetary policy, the central bank must rely on some operational, measurable and monitorable intermediary indicators, and finally achieve the established monetary policy goal through the regulation of intermediary indicators.
Intermediary indicators include: interest rate, money supply, excess reserve, base currency, exchange rate, etc.
1. interest rate
Raising or lowering the interest rate can reduce or increase the money supply, and then adjust the total market demand.
2. Excess reserves
Adjusting the excess reserve can control the capital shortage of commercial banks and various financial institutions, and then control the money supply.
3. Base currency
Base money-the basis for the expansion and contraction of money supply several times, is the source of the formation of market money.
The transmission mechanism of fiscal policy is more direct than monetary policy.
Generally speaking, fiscal policy directly affects enterprises and residents, and then affects the implementation of the national economy.
If the fiscal expenditure is expanded, it will directly or indirectly increase the income of enterprises and individuals, and the increase of the income of enterprises and individuals will correspondingly increase the total social demand, which has a positive effect on regulating the contrast between the total social demand and the total supply.
Another example is that * * * will adjust the income level of enterprises and individuals by adjusting the tax rate and using the automatic stabilizer function of progressive personal income tax.
Third, the policy means are different.
Fiscal policy means-mainly taxes, budgets, subsidies, bonds, etc. -all act on policy objectives through certain channels and ways.
The main means of monetary policy-open market business, adjustment of statutory reserve ratio, rediscount policy, etc.
Fourth, the policy lag is different.
Policy lag-refers to the time needed from recognizing the need for policy action to producing results.
1. Policy delay can be divided into internal delay and external delay.
The shorter the policy lag, the more timely the policy authorities will respond to the relevant situation, and the faster the policy can play its role.
Policy time lag can be divided into internal time lag and external time lag.
* * *1* * Internal time lag refers to the time required for the process of taking policy actions, including cognitive time lag, decision-making time lag and action time lag.
Cognitive lag-refers to the time required between the policy authorities' awareness of the problem and their decision to adopt policies.
The cognitive lag of fiscal policy is roughly the same as that of monetary policy.
Decision-making lag-refers to the time required between the decision-maker's awareness of the need to take policy action and the completion of policy formulation. Because financial means and changes need to go through complicated decision-making procedures, the decision-making time lag of fiscal policy is generally longer than that of monetary policy.
Action lag-refers to the time required from the completion of policy formulation to the beginning of implementation.
Once the monetary policy means is decided to change, it can be implemented immediately, so the action lag is short. At this point, we can draw a preliminary conclusion: the inherent lag of fiscal policy is longer than that of monetary policy. It should be noted that this is the part about "discretionary" fiscal policy. If fiscal policy is implemented through "automatic stabilizer", its internal time lag does not exist or is zero.
***2*** External time lag-refers to the time required from the implementation of the policy to the effect of the policy on the target.
Fiscal policy usually directly affects income and expenditure * * * including consumption expenditure and investment expenditure * * *;
Monetary policy indirectly affects income, consumption and investment by influencing intermediary indicators.
The external lag of fiscal policy is shorter than that of monetary policy, which shows that fiscal policy can regulate the implementation of economy more quickly. However, this is often offset by the long-term internal lag of fiscal policy. As far as the overall policy lag is concerned, we can't generalize who is long or short in fiscal policy and monetary policy, but we should analyze it according to the specific situation.
Fifth, the impact on interest rate changes is different.
Expansionary fiscal policy may lead to an increase in interest rates, while expansionary monetary policy may lower interest rates.
Reason:
1. expansionary fiscal policy refers to * * raising funds in the financial market, which does not increase the money supply of the whole financial market, but only transfers the funds of individuals and enterprises to * * *. Because * * occupies private funds, it may have a crowding-out effect on investment and consumption, which makes the financial market tense and may lead to an increase in market interest rates.
2. Expansive monetary policy means an increase in money supply, which has a restraining effect on interest rates.
Under the condition of market economy, the different influence on the direction of interest rate change is an important difference between fiscal policy and monetary policy. This difference shows that fiscal policy and monetary policy can be used as two different tools to achieve some conflicting goals.
Differences and relations between fiscal policy and monetary policy
Fiscal policy and monetary policy, as two basic policy means of national macroeconomic regulation and control, mainly regulate the relationship between total social supply and total demand by implementing expansionary or contractive policies. Both have their own emphases, differences and close ties.
First of all, the difference
1, which have different meanings. Fiscal policy refers to an economic policy that affects the total demand by adjusting the total fiscal revenue and expenditure to make it adapt to the total supply. It includes fiscal revenue policy and fiscal expenditure policy. The so-called proactive fiscal policy is to make fiscal policy play a more direct and effective role in starting economic growth and optimizing economic structure by expanding fiscal expenditure. Monetary policy refers to the guiding principles and corresponding policy measures adopted by a country's central bank and monetary authorities to regulate the money supply and credit quantity in order to achieve certain macroeconomic goals. Its characteristic is that it indirectly affects the macro-economy through the intermediary of interest rate.
2. Decision makers are different. The fiscal policy is formulated by the state financial organ and must be approved by the National People's Congress or its congress, while the monetary policy is directly formulated by the central bank under the leadership of the State Council.
3. There are differences in policy objectives. Although economic growth, price stability, full employment and balance of payments are all macroeconomic goals of fiscal policy and monetary policy, they all have their own emphases. Monetary policy focuses on monetary stability, while fiscal policy focuses on other broader goals. In the adjustment of supply and demand structure, fiscal policy plays an irreplaceable role in adjusting industrial structure and promoting the rationalization of national economic structure. In regulating the fairness of income distribution, monetary policy often seems powerless and can only be solved by fiscal policy means such as taxation and transfer payment.
4. The adjustment range is different. Fiscal revenue and expenditure and its policies reflect all aspects of * * *' s functions, and its adjustment scope is not limited to the economic field, but also involves other fields of social life; Monetary policy mainly deals with matters within the functional boundaries of the commercial financial system, and its adjustment scope is basically limited to the economic field. Of course, it can also be indirectly transmitted from the economic field to other fields.
5. The focus of adjustment is different. Although both fiscal policy and monetary policy regulate the total amount and structure, fiscal policy has stronger structural characteristics than monetary policy, because fiscal revenue is organized according to different projects and regulations, which can directly regulate the income level of different regions, departments, enterprises and individuals, and fiscal expenditure is arranged according to the nature and use of funds, which can directly regulate all aspects of industrial structure, departmental structure and socio-economic structure; The adjustment of fiscal policy to the total amount mainly affects the global movement of social total funds through the balance of payments and its multiplier effect. On the contrary, monetary policy has more distinct aggregate characteristics than fiscal policy, because all investment demand and consumption demand in the national economy should be expressed as the purchasing power of money with the ability to pay, and the central bank, as the only department that can directly manage the total amount of money supply in the whole society, uses monetary policy to regulate it; At the same time, the market-oriented operation principle of commercial financial credit itself requires that the change of monetary tightness should equally cover all its capital movements. The loan differential interest rate and other means aimed at adjusting the structure by treating different industries, different industries, different enterprises and different projects differently can only be implemented and played a role in a relatively limited scope, and will become more and more limited with the promotion of China's market-oriented reform. The specific objectives of macroeconomic policy can be summarized as economic growth, optimal allocation of resources, price stability, full employment, countercyclical fluctuation, fair income distribution, rationalization and upgrading of industrial structure, etc. Although both fiscal policy and monetary policy serve this series of goals, due to the different emphasis mentioned above, their respective roles in different goals are different. For example, in the rationalization of industrial structure and the fair distribution of income, the importance of fiscal expenditure policy and tax policy is the first; In terms of stabilizing prices, the importance of monetary policy ranks first.
6. The means of adjustment are different. Fiscal policy means mainly include taxes, budgetary expenditures, public bonds, financial subsidies and interest subsidies, while monetary policy means mainly include interest rates, deposit reserve ratio, discount rate, open market operations and loan arrangements.
Fourth, at different stages of the economic cycle, the role space of fiscal policy and monetary policy is different. For example, people can compare monetary policy to a rope tied to an economic car. They think that when the economy enters inflation, it can be pulled too far, but when the economy is in deflation, it can't be pushed up. This metaphor vividly depicts the difference of monetary policy effect under different economic implementation conditions. Generally speaking, monetary policy is good at dealing with inflation, while fiscal policy has more advantages in dealing with insufficient domestic demand and solving deflation. 1998-2002 The regulatory effect in China's policy practice is consistent with the more effective fiscal policy in the depression stage in Keynesian theory.
7. The funds regulated by the two policies follow different economic implementation mechanisms. Under the control of monetary policy, commercial financial funds compete according to the market principle of pursuing micro-direct benefits and profits, and they are only willing to "add icing on the cake", that is, according to the principle of commercialization, they should invest as much as possible in high-yield and low-risk fields and enterprises in good condition, which is reasonable and understandable for commercial finance. Different from this, on the premise of recognizing the general principles of the market, the capital operation under fiscal policy can and should go beyond the micro-direct benefit field and focus on pursuing long-term, comprehensive, macro and social benefits. Fiscal policy can and must play an active role in paying attention to basic people's livelihood, implementing "timely assistance", adjusting income distribution gap and optimizing ecological environment.
8. The time lag of policy is different from the time lag of adjustment. Policy time difference refers to the time required for decision-making organs to realize the need to change policies and actually implement new policies. Generally speaking, when the formulation and revision of fiscal policy must be reviewed and approved by the legislature, the time lag of fiscal policy is long; Monetary policy is usually formulated by a few high-level decision makers of the central bank, with strong independence and short time lag. Adjustment lag refers to the time required for a policy from the occurrence of adjustment actions to the occurrence of adjustment effects. Generally speaking, fiscal policy usually has a short time lag because of its background of directly arranging revenue and expenditure and the use of some compulsory means; However, monetary policy usually relies entirely on indirect means to adjust the object, which lags behind fiscal policy.
Second, contact
1, fiscal policy and monetary policy are economic policies of national macroeconomic regulation and control. They mainly implement expansionary or contractive policies, adjust the relationship between total social supply and total demand, maintain the balance of economic aggregate, promote the optimization of economic structure, and realize the sustained, rapid and healthy development of the national economy.
2. The ultimate goal of fiscal policy and monetary policy is the same. Both require stable currency, stable economic growth, full employment of workers and balance of international payments to promote the development of socialist market economy.
3. In general, fiscal policy and monetary policy are synergistic. The characteristic of fiscal policy is that the policy operation is strong, which can quickly start investment and stimulate economic growth, but it is easy to cause excessive deficit, economic overheating and inflation. Therefore, fiscal policy plays the role of an engine of economic growth, which can only be adjusted in the short term and cannot be used in large quantities in the long term. Monetary policy, on the other hand, mainly focuses on fine-tuning, which lags behind obviously in starting economic growth, but it has long-term effects in curbing economic overheating and controlling inflation. It is characterized by direct, rapid and flexible regulation through money supply and credit quantity. Because the coordination of fiscal policy and monetary policy is a combination of two policy prescriptions with different lengths, they can form a joint force and play a regulatory role in the effective implementation of the market economy.
4. The means to realize fiscal policy and monetary policy intersect. Whether the fiscal policy can be successfully implemented and achieved results is inextricably linked with the coordination of monetary policy. National debt connects the independent fiscal policy and monetary policy originally implemented by the financial organ and the central bank respectively, and becomes the best combination point of fiscal policy and monetary policy.
In a word, fiscal policy and monetary policy, as two basic policy means of national macroeconomic regulation and control, have different regulatory emphasis and means, different regulatory influence and scope, and are closely related and interactive. Only by correctly understanding and accurately handling their relationship can they give full play to their due positive role.
As the two major means of national macro-control-fiscal policy and monetary policy. First of all, these two policies are intrinsically linked, and at the same time, the regulatory focus of these two policies is not exactly the same.
Generally speaking, monetary policy may focus more on the adjustment of aggregate; Fiscal policy may pay more attention to structural adjustment.
Secondly, fiscal policy plays an outstanding role in regulating income distribution; Monetary policy may pay more attention to maintaining monetary stability.
In addition, fiscal policy plays a more prominent role in controlling deflation; Monetary policy plays a more prominent role in controlling inflation.