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Macroeconomics Papers (University Edition)
On the transformation of China government's macro-control model

The macro-control mode of China government refers to the specific relationship formed by the government in regulating the macro-economic operation of China. It mainly includes three aspects: government economic function, government macro-control behavior and government macro-control relationship. The internal logical relationship is: the economic function of the government is the foundation, which determines the nature of the government's macro-control behavior, that is, what the government cares about determines what measures it takes (what kind of behavior it uses) to achieve its goals; The nature of the government's macro-control behavior ultimately determines the nature of the government's macro-control relationship, that is, different types of government's economic control behavior lead to different types of relationships between the government and economic entities; The relationship between government macro-control that has nothing to do with type (nature) in turn affects the nature of government macro-control behavior and the degree of realization of government economic functions. In this way, the three are interrelated and interact to form two dynamic macro-control modes. With the deepening of China's transition from planned economy to market economy, the macro-control mode of our government has also undergone major changes, mainly in the transformation of government functions; Changes in government macro-control behavior; The transformation of the government's macro-control relationship. This paper attempts to discuss the transformation of China government's macro-control mode from these three aspects.

One of the conditions for the effective operation of our government's macro-control model is to solve what role it will play, that is, the object of macro-control. Under the condition of market economy, the economic function of our government has changed greatly, that is, from micro-economy centered on planned economy to macro-economy. Under the condition of market economy, this transformation of China government's economic function has the following characteristics:

Appropriateness of "Positioning" of China Government's Economic Function. The economic function of our government is no longer the original planned economy period that completely abandoned the role of the market and the government monopolized control, but the rational division of labor between the market and the government, and the two functions complement each other. Both the market and the government are tools to allocate social resources. Where the market can allocate resources, it will play a role, such as efficiency, competitiveness and vitality. At the same time, because the market is not omnipotent, where the market fails, the government should give full play to its role, mainly as follows: (1) The market mechanism can neither control the macroeconomic aggregate balance nor control the cyclical fluctuation and inflation of the economy. Formulating and implementing macro-control policies is one of the economic functions of the government; (2) Public goods have the characteristics of "non-exclusiveness of consumption" and high cost and low income, which makes the market mechanism centered on price mechanism fail in providing public goods. In this way, providing public goods is the second economic function of the government; (3) The "negative externalities" generated by economic activities mean that they adversely affect others and impose some costs on others without paying the price, such as environmental pollution caused by enterprises. Market mechanism alone cannot attract enterprises to consciously control pollution and eliminate negative externalities. The government should be duty-bound to undertake the function of eliminating economic externalities, which is the third economic function of the government: (4) As we all know, although the market mechanism can effectively solve the problem of efficiency, it cannot solve the problem of social equity. Adjusting social distribution and narrowing the income gap is the fourth economic function of the government. (5) The effective operation of market mechanism lies in the guarantee of legal norms. Therefore, establishing a legal system and maintaining market order is the fifth economic function of the government. These five basic government economic functions are the products of mutual cooperation and coordination between the government and the market, which embodies the appropriateness of the "positioning" of government economic functions.

Scientific orientation of government's economic function. Economic development has its inherent laws, and people will succeed if they follow these laws. Otherwise, you will be punished. The key to grasp the economic law is to correctly handle the interaction between market and government in economic development. This has been proved by the history of economic development at home and abroad. During the planned economy period, China completely ignored the role of the market and blindly emphasized the role of the government, which had all-encompassing economic functions. As a result, China's national economy almost collapsed. Since the Third Plenary Session of the Eleventh Central Committee, especially after the 14th National Congress, we have gradually broken through the barriers of planned economy, implemented a market economy, transformed government functions, and given full play to the coordinating role of the market and the government, which has enabled China's national economy to develop rapidly and healthily, and has made great achievements and attracted worldwide attention. In the early stage of the development of capitalist market economy, some countries accepted Adam Smith's laissez-faire thought, and put the government only in the position of "night watchman", which weakened the economic function of the government and completely let the market regulate the operation of the economy, resulting in the 20th century.

In 1930s, it was "the deepest, longest and most extensive economic crisis in the capitalist world". As a result, countries have abandoned laissez-faire thought and accepted Keynes's economic intervention thought. The government changed from a "night watchman" to an active "intervener", which strengthened the government's functions, and economic activities were supervised by the government, which weakened the role of the market mechanism and once again led to the "stagflation" of capitalist countries' economies in the 1970s. To this end, countries sum up their experiences, actively explore the relationship between government and market, adopt a "mixed" economic model combining government and market, give full play to the coordinating role of government and market in the process of economic operation, and promote economic development. To sum up, Chinese and foreign governments have made mistakes in exploring the role of the government in the process of economic operation, that is, in reasonably determining the economic functions of the government, because they have not correctly handled the responsibility relationship between the government and the market, which fully proves the scientific nature of the "positioning" of the economic functions of the government in China.