How many types of "monetary policies" do central banks have?
Fiscal policy refers to adjusting aggregate demand through fiscal expenditure and taxation policies based on the need to stabilize the economy. Increased government spending can stimulate aggregate demand, thereby increasing national income; on the contrary, it can suppress aggregate demand and reduce national income. Taxes are a contractionary force on national income. Therefore, increasing government taxes can depress aggregate demand and thereby reduce national income. On the contrary, it can stimulate aggregate demand and increase national income. Monetary policy in a narrow sense: refers to the central bank using various tools to adjust money supply and interest rates in order to achieve established economic goals (stabilizing prices, promoting economic growth, achieving full employment, and balancing the international balance of payments), thereby affecting economic and social development. Behavior. Overall macroeconomic policies and measures. combine. Broad monetary policy: refers to all monetary regulations and measures taken by the government, central bank and other relevant departments to affect financial variables. (Including financial system reform, i.e. changes in rules, etc.) The main difference between the two is... All
Fiscal policy refers to adjusting aggregate demand through fiscal expenditure and taxation policies based on the need to stabilize the economy. Increased government spending can stimulate aggregate demand, thereby increasing national income; on the contrary, it can suppress aggregate demand and reduce national income. Taxes are a contractionary force on national income. Therefore, increasing government taxes can depress aggregate demand and thereby reduce national income. On the contrary, it can stimulate aggregate demand and increase national income.
Monetary policy in a narrow sense: refers to the central bank using various tools to adjust money supply and interest rates in order to achieve established economic goals (stabilizing prices, promoting economic growth, achieving full employment, and balancing the international balance of payments), thereby affecting economic and social development. Behavior. Overall macroeconomic policies and measures. combine. Broad monetary policy: refers to all monetary regulations and measures taken by the government, central bank and other relevant departments to affect financial variables.
(Including financial system reform, that is, rule changes, etc.) The main difference between the two is that the policy makers of the latter include the government and other relevant departments. They often affect exogenous variables in the financial system and change the rules of the game, such as hard limits. Credit scale, credit direction, opening and developing financial markets.
The former is the central bank's use of discount rates, reserve requirements, and open market operations to achieve the goal of changing interest rates and money supply in a stable system. Currently, our country is implementing: Fiscal and Monetary Stability Policy [Abstract] Fiscal policy and monetary policy are the two basic policy means of national macro-control.
Both mainly implement expansionary or contractionary policies to adjust the relationship between aggregate social supply and aggregate demand. Both have their own emphasis and are closely related. The relationship between the two must be accurately grasped and correctly handled. Fiscal policy and monetary policy must be coordinated and flexibly used according to the actual situation to fully play their due role and ensure the healthy, sustained and rapid development of the national economy. .
The state's regulation of the supply and demand of social funds should avoid administrative intervention as much as possible, and should mainly use economic means to guide it. When the effect of monetary policy is not obvious, fiscal policy should play its due role. At the same time, maintaining a certain scale of national debt is not only an important means of fiscal policy control, but also provides necessary conditions for the central bank to develop the bond market and conduct open money market operations, thereby enhancing the effectiveness of fiscal policy. Monetary policy transmission mechanism.
Fiscal policy and monetary policy are the two basic policy tools for national macro-control. Both mainly implement expansionary or contractionary policies to adjust the relationship between aggregate social supply and aggregate demand. Both have their own emphasis and are closely related. The relationship between the two must be accurately grasped and correctly handled. Fiscal policy and monetary policy must be coordinated and flexibly used according to the actual situation to fully play their due role and ensure the healthy, sustained and rapid development of the national economy. .
1. The scale of government bonds issued by the finance department to banks is an important channel for regulating the money supply. In today's society, a country's monetary aggregate refers to the total purchasing power of social currency expressed in monetary units, mainly including cash (or banknotes) and bank deposits. ("deposit currency"), of which bank deposits account for an increasingly larger proportion and cash accounts for a smaller proportion.
Therefore, the so-called currency injection definitely refers not only to the injection of cash, but also to the injection of deposit currency. At present, the main channels for a country’s currency issuance include: 1. The central bank purchases banknotes to reserve gold (or other reserve materials); 2. The central bank purchases foreign exchange reserves; 3. The central bank purchases treasury bonds or provides government (financial) overdrafts; (4) The central bank Grant loans to various lending banks, or purchase treasury bonds, central bank bills, financial bonds, etc. held by lending banks, and issue loans to the society through lending banks; 5. After lending banks absorb deposits, in addition to depositing a certain proportion of deposits with the central bank Or, in addition to maintaining a certain reserve deposit, extend loans to the society, creating a multiplier effect on loans; 6. Banks other than the central bank purchase treasury bonds, corporate bonds, foreign exchange, etc.
In addition, looking at the total purchasing power of a country's currency, the inflow of overseas funds and the outflow of domestic currency will also affect the total amount of social currency (this requires detailed analysis of net inflows or net outflows). At present, the most adjustable currency injection channels in our country are: first, bank loans, which are also the most important currency injection channels; second, banks purchase national bonds and inject currency into the society through fiscal expenditures.
There is limited room for expansion in other channels. Here, the increase in the fiscal issuance of treasury bonds to banks means that banks increase currency injection (thus also producing a multiplier effect of fiscal injection); the fiscal repayment of treasury bonds issued to banks means that banks reduce currency injection (increase currency withdrawals).
In other words, fiscal revenue and expenditure are not only reflected in the receipt and payment of social currency, but also in the redistribution of social currency. The scale of government bonds issued to banks is an important channel for regulating the total money supply. This is also an important manifestation of the close relationship between fiscal policy and monetary policy. 2. Use two channels to effectively adjust the total amount of currency, especially the "amount of currency in circulation." Generally speaking, the total currency of society is the total purchasing power of society expressed in currency, that is, the total social demand. However, starting from a certain period of time, there will always be a part of the total amount of social currency that separates from the field of social production and circulation and precipitates, and does not form actual purchasing power in the current period.
Therefore, the total amount of money in society can be divided into two parts: "the amount of money in circulation" and "the amount of precipitated money". What really affects the effective social demand in a certain period is not entirely the total amount of money in society, but mainly the amount of money in circulation. Of course, changes in the quantity of money in circulation are closely related to changes in the total amount of money.
Judging from the regulatory effects of monetary policy and fiscal policy on the total amount of money in society, especially the amount of currency in circulation, there are obvious differences between the two and they cannot replace each other. From the perspective of the basic objects of monetary policy control, the funds released by bank loans and the funds formed by loans are debt funds. Generally, there is a specified loan period, and the principal and interest must be repaid upon maturity. Loan interest is the price of loan funds. or cost.
Therefore, a loan is more like a purchase and sale of funds. Whether it can be released and how much is actually released depends on the willingness of buyers and sellers and the scale of bank credit funds, and is not unconditional. Among them, banks can increase loan demand by lowering loan interest rates and loan conditions, but lowering interest rates has a limited stimulating effect on loan demand, especially in a society that lacks sufficient cost-effectiveness awareness and constraints; excessive lending regardless of costs and risks is also inconsistent with Bank operating principles and regulatory requirements must be strictly controlled.
The growth of bank loans fundamentally depends on borrowers' expectations and confidence in future income or investment returns. Faced with insufficient effective demand for loans and deflationary pressure, expansionary monetary policies often have very limited stimulating effect on money demand. However, when social loan demand is strong, currency circulation increases, and inflationary pressures arise, banks, as money suppliers, play a far greater role in controlling the money supply than in expanding the money supply.
In addition, banks can also adjust social deposit intentions to a certain extent by raising or lowering deposit interest rates, thereby adjusting the ratio of deposit currency to circulating currency to a certain extent. However, society’s willingness to deposit is also affected by a variety of factors, especially changes in expected future income and expenditures. Simple interest rate adjustments have a limited regulatory effect on deposits.
From the perspective of the impact of fiscal policy on the total amount of currency and the amount of currency in circulation, when society's willingness to deposit is strong and investment and consumption demand are insufficient, it is necessary to absorb part of the currency deposited by society (including bank deposited funds) through the issuance of government bonds and fiscal expenditures. The method of investment can directly and effectively adjust the ratio of the amount of deposited currency to the amount of currency in circulation in the current period. It can also drive private investment by improving the investment environment, improve social revenue and expenditure expectations, and enhance people's confidence in future economic growth, thereby stimulating social investment and consumption. Demand grows.
However, the issuance of national debt is a debt owed by the country to society and must be repaid. Therefore, it is necessary to ensure the quality and efficiency of government bond investment and avoid the "crowding-out effect" of increased fiscal investment on private investment. The total amount of national debt issuance must be controlled within fiscal capacity to avoid triggering a serious fiscal crisis.
At the same time, it must also be noted that financial investment is a type of equity investment. It represents the ownership of the invested enterprise or project, and therefore enjoys the right to manage, distribute dividends and dispose of the invested enterprise and project, but it is not mandatory. Right to return on investment. This means that after the fiscal expansion of investment, once faced with inflationary pressure, currency injection needs to be controlled, and it will be very difficult to recover the investment. For some projects with long investment cycles, if follow-up investment is stopped in a hurry, it may also cause heavy losses. .
Monetary policy and fiscal policy not only play different roles in regulating the total amount of money, especially the amount of currency in circulation, under different circumstances, but the nature of bank loans and fiscal investment are also completely different. We must correctly understand and accurately grasp the essential characteristics and fundamental differences between the two, give full play to their due functions, and cannot confuse the two.
Our country implements "allocation to loan", changing the state's allocation (investment) to state-owned enterprises into bank loans. Although this has played a positive role in solving special problems in a certain period, it has also brought new impacts. Far-reaching problems: Enterprises are severely short of funds and have heavy financial burdens; fiscal appropriations will be replaced by bank loans, banks will lose their standards and autonomy in loan control, and banks will become cashiers of the Planning and Finance Commission; bank loans will replace appropriations and give enterprises The reason for not repaying the loan (there is no investment repayment problem), thus causing serious corporate integrity problems of non-repayment of state-owned bank loans.
These are lessons worth studying carefully. It needs to be emphasized that fiscal policy is a reflection of the country’s will. Although the internal time lag of policy formulation may be relatively long, once determined, its implementation is mandatory, while the external time lag is short. Monetary policy mainly relies on adjusting deposit and loan interest rates, deposit reserve ratios, bill rediscount rates and re-lending interest rates, etc., and indirectly adjusts private deposit and loan intentions and bank loan intentions. Its effects can only be transmitted through multiple links. Therefore, its external delay is relatively long.
In order to promote the continuous improvement of market mechanisms, the state's regulation of the supply and demand of social funds should avoid administrative intervention as much as possible, and should mainly use economic means to guide it. In this case, when the effect of monetary policy is not obvious, fiscal policy should play a role. due driving role. At the same time, maintaining a certain scale of national debt is not only an important means of fiscal policy control, but also provides necessary conditions for the central bank to develop the bond market and conduct open money market operations, thereby enhancing the effectiveness of fiscal policy. Monetary policy transmission mechanism.
It can be seen that monetary policy and fiscal policy must work closely together and support each other, but they cannot replace or shirk each other. 3. Pay close attention to the control of the total amount of currency and the amount of currency in circulation. The adjustment of the standard monetary aggregate or total social demand is a very complicated matter. It is difficult to accurately grasp the direction and scale of adjustment, but it is the key that must be made clear. question.
We know that the main purpose of adjusting the total amount of currency and currency circulation is to maintain moderate and stable growth of the national economy and maintain relative price stability, thereby ensuring maximum employment, social stability and the development of foreign trade. Based on this, we can be sure that the determination of the growth rate of the total currency volume and circulation mainly depends on the growth target of the national economy (generally expressed as gross domestic product) and change targets. General consumer price index.
How high the economic growth rate should be maintained or how much it fluctuates, and within what range the general consumer price index fluctuations should be controlled, need to be studied as important national economic planning indicators and reported to the National People's Congress for approval. Once these two indicators are determined, the control target of money supply can be determined. Since there is a lag in the impact of currency injection or withdrawal on GDP, the target growth rate of money supply is also affected by the correlation function between the growth rate of money supply and GDP growth rate (referred to as the "relationship function").
The accurate determination of this relationship function is crucial for accurately grasping the money supply regulation target. In order to maintain the continuity of monetary policy and avoid ups and downs in currency circulation, the total amount of currency (approximately expressed as M2) and the amount of currency in circulation (approximately expressed as M1) can be calculated according to the relationship between M2 and M1 in the previous three years (or appropriate period). The relationship function is determined by the average ratio of growth rate to GDP growth rate over the same period.
On this basis, the possible impact of major events discovered during the implementation of the goals will be used as "adjustment items" to determine the target growth rates of M2 and M1. The calculation formula is: M2 target growth rate = GDP target growth rate × M2 relationship function ± price target change rate ± adjustment project M1 target growth rate = GDP target growth rate × M1 relationship function ± price target change rate ± actual adjustment project implementation process If The actual growth rate of M2 and M1 deviates greatly from the target growth rate (for example, the difference is more than 3 percentage points), and the actual change rate of GDP or general price index deviates greatly from the target (for example, it is lower than the minimum target value or higher than the maximum target value 0 .
5 percentage points or more), should be appropriately adjusted in the opposite direction. In this way, the adjustment direction and goals of monetary growth will be clearer. After determining the direction and objectives of monetary growth regulation, fiscal policy and monetary policy must be adjusted and coordinated accordingly to ensure the realization of the monetary growth regulation objectives.
In short, fiscal policy and monetary policy, as two basic policy means of national macroeconomic control, have different control focuses and means, different control impacts and scopes, but they are closely related and influence each other. It must be understood correctly and handled accurately. The relationship between the two can give full play to the positive role they should have.
标签： #Currency #Finance #Investment #Loan #Policy
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