Introduction: The prices of 1979 and 1980 have increased significantly, among which 1980 inflation reached 6%. Later, after a series of measures, such as reducing investment in capital construction, tightening monetary policy and controlling prices, China's inflation was contained, which was manifested in 1980. In February, the State Council's Notice on Strictly Controlling Prices and Rectifying Bargaining Price controlled inflation.
Cause analysis: 1980 inflation occurred in the period when China began to implement the policy of reform and opening up, and the focus of the party's work had just shifted to socialist modernization. Macroscopically, rapid economic growth, sharp increase in investment scale and fiscal expenditure have led to a serious fiscal deficit, blind expansion of imports has led to a foreign trade deficit, and foreign exchange reserves have rapidly approached zero.
To sum up, the main reason for this inflation is the serious domestic fiscal deficit.
Solution: In view of this inflation, although the government stressed that capital construction must be carried out actively and orderly, it should not be rushed into action. However, due to the inconsistent understanding of adjustment from the central government to the local government, 1979 stopped the construction of a number of large and medium-sized projects, and 1980 continued to stop the construction of a number of projects, but the total scale of capital construction has not decreased, and the financial power of local and enterprises has expanded. Finally, with the sharp rise in prices, we had to take "sudden braking" measures at 198 1 to further reduce the scale of infrastructure investment. At this stage, macro-control mainly adopts administrative and planning means to rectify the economy.
"The second inflation-1984 to 1985"
Introduction: In order to curb high inflation, a series of measures were taken at that time, such as controlling the scale of investment in fixed assets, strengthening price management and supervision and inspection, and comprehensively carrying out credit inspection. It shows a series of macro-control measures issued by the State Council from 1984+0 1 to 1985+0.
Cause analysis: 1984- 1985 Inflation is reflected in the fact that the rapid investment in fixed assets leads to excessive total social demand, and the increase in wage income exceeds the increase in labor productivity, leading to higher costs. With the rapid expansion of infrastructure scale, social consumption demand and money and credit supply, the economy is overheating and inflation is intensifying.
To sum up, inflation at this stage is driven by demand. That is, the expansion of total demand exceeds the normal needs of circulation.
Solution: In view of the overheated economy of 1984, in June of that year, the State Council requested all localities and departments to strictly control credit supply. In terms of credit control policy, the central bank began to establish comprehensive economic, administrative and legal control measures, such as establishing a deposit reserve system. Due to the lack of necessary practical experience in policy operation and improper control, the "double tight" policy of 1985 not only curbed the total demand, but also led to a decline in economic growth, and was forced to change to a more relaxed policy, canceling the mandatory control on the loan scale of specialized banks.
"The third inflation-1987 to 1989"
Description: The retail price index 1988 has set a record for the highest increase since the founding of the People's Republic of China 40 years ago. Rising prices and snapping up have caused a series of social problems. Faced with the sudden impact, the central government immediately responded by convening a meeting to rectify the economic order. So in June 1989 1 1 The Fifth Plenary Session of the 13th CPC Central Committee adopted the "Decision of the Central Committee on Further Rectification and Deepening Reform", proposing that it will take three years or more to basically complete the rectification task and take major adjustment measures.
Cause analysis: the inflation of 1987- 1989 is due to the austerity policy adopted by the central government, and the demand of 1986 began to be completely relaxed, which led to serious expansion.
Solution: In order to curb inflation, the government had to adopt a macroeconomic policy of "double austerity" from 65438 to 0989. From 65438 to 0988, the central bank implemented a tight monetary policy, tried various indirect control measures such as raising the statutory deposit reserve ratio, raising the deposit and loan interest rates of specialized banks, and recovering loans, and began to pay attention to the control of the base money supply. June 1989 1 1 adopted fiscal and monetary policies such as clearing up fixed assets investment projects, reducing the purchasing power of social groups, and strictly controlling the loan scale.
"The fourth inflation-1993 to 1995"
Brief introduction: Some people vividly summarize the current inflation as "four fever" (real estate fever, development zone fever, fund-raising fever and stock fever), "four highs" (high investment expansion, high industrial growth, high currency issuance and credit supply, high price rise), "four tightens" (tight traffic, energy, important raw materials and funds) and "chaos" (. This time, the control of inflation began with the measures put forward in the Opinions of the Central Committee of the State Council on the Current Economic Situation and Strengthening Macro-control in June 16. After three years of control, China achieved a "soft landing" of its economy with 1996.
Cause analysis: 1993- 1995 Inflation shows that China's economy has entered the fast lane of rapid growth after Deng Xiaoping's southern tour speech, mainly due to the excessive expansion of fixed assets investment scale and the constant financial chaos. Because of the rapid economic growth, demand-driven inflation and the influence of credit expansion.
Solution: Zhu Rongji, then Premier of the State Council, adopted a "moderately tight" monetary policy to enhance the output effect of money supply, improve the efficiency of the use of money funds, and make money supply play an active role in increasing total supply and restraining total demand; The deposit interest rate once rose to about 12%, and the savings over five years can still get interest of about 12%, that is to say, the long-term deposit interest rate is almost 25%, and the interest rate in the first year of ten thousand is 2500 yuan. I'm afraid this high interest rate is rare in the world. In order to curb speculation in the stock market, the daily limit, T+ 1 and transaction tax were raised together, which eventually led to two big dives of 1995- 1996, and the China stock market entered a bear market for several years. China investors understood the meaning of the word "no sale" at the cost of blood. Deflation: Also known as "monetary deflation". Measures to reduce the amount of money in circulation to alleviate inflation. The main measures are: ① using general monetary policy tools to shrink credit and reduce money supply. ② Using fiscal policy tools to reduce budget expenditure, increase taxes, freeze wages and reduce the purchasing power of market currency. When inflation is high, deflation will make the price level stop rising and fall, or even continue to fall; When the effective demand is insufficient, it will lead to shrinking production, rising unemployment rate and increasing inventory. Therefore, deflation measures are generally only used when inflation is high. When some countries implement deflation policies, they will be supplemented by positive economic restructuring measures to achieve a "soft landing" of their economies.
The fifth inflation since 2007
Introduction: Since June 65438+ 10, 2007, the People's Bank of China has raised the interest rate for six consecutive times and the deposit reserve ratio for 10 times. However, domestic prices have not decreased because of regulation, but have risen all the way. Until June 2008, 65438+ 10, the consumer price rose by 7. 1% over the same period of last year, reaching 10. In 2008, international commodity prices changed dramatically, and the global financial crisis continued to worsen. China's economy, which is more and more closely linked with the global economy, has suffered roller coaster-like fluctuations in the external environment.
Cause analysis: In particular, excessive dependence on foreign countries brings huge foreign trade surplus, which leads to rapid growth of foreign exchange reserves, excessive market liquidity caused by currency hedging, and serious asset price "bubble". Since the outbreak of the financial crisis in 2008, the government has invested 4 trillion yuan in infrastructure construction to promote domestic consumption. Excessive currency is also the cause of this inflation.
Solution: (1) Adopt a comprehensive policy involving exchange rate, interest rate and reserve ratio.
Exchange rate, interest rate and reserve ratio are all measures taken by the central bank to tighten monetary policy in order to control inflation. Adopting a comprehensive policy involving exchange rate, interest rate and reserve ratio can greatly curb consumption growth and control excessive price growth, thus achieving the purpose of controlling inflation.
From March 2007 18 to February 2, 20071,the central bank has raised the bank's benchmark interest rate six times in a row. The benchmark interest rate for one-year deposits was raised from 2.52% to 4. 14%, and the benchmark interest rate for one-year loans was raised from 6. 12% to 7.47%. From 65438+20071October 15 to 65438+February 25, 2007, the central bank has continuously raised the deposit reserve ratio 10 times, sometimes 0.5%, sometimes 1%, and from 9% to/kloc-. Since May 2, 2007, the fluctuation range of RMB against the US dollar in the inter-bank spot foreign exchange market has been expanded from 3‰ to 5‰.
(2) Adopt a prudent fiscal policy by adjusting tax rates and reducing the issuance of government bonds.
The supply of tax system is one of the macro-economic control means mastered by the state. Tax regulation will play the role of automatic stabilizer and artificial stabilizer for money demand. The purpose of issuing treasury bonds is to balance the national fiscal revenue, make up the fiscal deficit and raise construction funds. Perfecting the tax system and issuing national debt are still feasible anti-inflation policy tools at present. In order to curb the current inflation, on the one hand, we should adjust the tax rate. For example, starting from 1 in March 2008, China's tax threshold will be raised from the current 1600 yuan/month to 2,000 yuan/month; After August 2007 15, the applicable tax rate of interest tax was reduced from 20% to 5%. On the other hand, reduce the issuance of government bonds. The formulation of specific circulation should consider the degree of fiscal deficit, the capital demand of national debt projects under construction, and the regular investment in agriculture, social security, education and public health.
(c) Strengthening national price control.
In 2007, the CPI rose rapidly, and the fiscal and monetary policies adopted by the state were relatively lagging behind. It will take some time for the effects to show, so it is necessary to strengthen the state's control over prices. On the one hand, price control can directly control prices, on the other hand, it can regulate behaviors including driving up prices and disrupting the market. For example, on June 5438+1October 65438+May 5, 2008, the National Development and Reform Commission promulgated the Implementation Measures for Implementing temporary price-intervention Measures on Some Important Commodities and Services. The temporary price-intervention measures initiated this time are mainly price increase declaration and price adjustment filing. However, price control is only a short-term behavior to control the price increase, and in the long run, this method can not fundamentally solve the problem.