How to control deflation

Question 1: the influence of deflation and its control measures? Deflation will shrink the macro economy, the unemployment rate will remain high, the growth of national fiscal revenue will slow down, enterprises will not raise wages and bonuses, and even a large number of enterprises will close down.

To control deflation, there are generally the following measures:

1, reduce the bank deposit reserve ratio (every 0.5 percentage point reduction will release about 500 billion RMB in circulation).

2. Reduce the deposit and loan interest rates.

3. Increase the circulation and supply of money.

4.* * * Encourage investment and increase * * * procurement.

5. Increase the circulation of national debt and local debt.

6, adjust (tax reduction) tax policy

7. Adjust fiscal policy (increase budget deficit)

8. Reduce the issuance of central bank bills and directional bills.

For China, a country with a huge economic aggregate, it is not difficult to control deflation in a multi-pronged way.

Question 2: 3. How to control inflation and deflation? Generally, it is achieved through macro-control.

Inflation can be controlled by raising the interest rate of bank deposits as follows:

Tight macroeconomic policy

Because a direct cause of inflation is that the total demand is greater than the total supply, when there is a big inflationary pressure in economic operation, * * * often adopts tight fiscal policy and monetary policy to curb excessive total demand.

1. Tightening credit policy

Tight monetary policy means that the central bank reduces the amount of money in circulation by reducing the issuance of money to curb inflation.

The use of monetary policy to curb inflation is mainly achieved in two ways:

The first is to reduce the growth rate of money supply.

The second is to raise interest rates.

2. Tight fiscal policy

Tight fiscal policy mainly suppresses inflation by cutting expenditure and increasing fiscal revenue.

The use of fiscal policy to control inflation is mainly through the following channels:

First, tax increase will reduce the profits and income of enterprises and individuals, thus reducing their investment and consumption expenditure;

Second, cut fiscal expenditure to eliminate the fiscal deficit and balance the budget, thus eliminating the hidden danger of inflation;

The third is to reduce * * * transfer payments and social welfare expenditures, thus curbing the increase of personal income.

Income policy

The theoretical basis of income policy is cost-driven inflation. Income policy refers to controlling the growth of general prices by limiting wage growth and obtaining monopoly profits.

This repressive income policy mainly takes the following forms:

(1) Wage and price control. That is, * * * issued a decree to forcibly raise wages and prices, and even temporarily freeze wages and prices. Wage and price control is usually carried out through moral advice and guidance and wage freeze.

(2) Profit control. Profit control refers to * * * forcibly restricting the profits of large enterprises or monopoly industries, thus curbing inflation.

Income indexation policy (reducing the distribution effect of inflation)

Income indexation policy, also known as index linkage policy, refers to the price index clause of monetary contract, which makes wages, interest, securities income and other income partially or completely related to the price index, and makes all kinds of income rise and fall with the rise and fall of the price index.

Deflation is relatively rare in China at this stage, and the control measures are as follows:

Loose monetary policy

Adopting a loose monetary policy can increase the amount of money in circulation, thus * * * total demand.

slack fiscal policy

Expanding fiscal expenditure can directly increase the total demand, and can also drive the increase of private investment through the "multiplier effect" of investment.

(3) structural adjustment

For deflation caused by absolute overproduction of certain industries or commodities at a certain level, structural adjustment is generally adopted, that is, reducing the output of surplus departments or industries and encouraging the development of emerging departments or industries.

Change expectations

* * * Increase the public's confidence in the future economic development trend through various publicity means.

(5) Improve the social security system.

Establish and improve the social security system, appropriately improve the national income distribution pattern, raise the income level and consumption level of middle and lower class residents, and increase consumer demand.

Question 3: What are the consequences of deflation? What shall we do? The economy is depressed, there are surplus commodities, factories are underemployed, unemployment is increasing, and prices are generally falling.

If you have a chicken or a fixed income (no layoffs, no salary cuts! ), just spend with peace of mind, almost everything is cheap, air tickets, hotels, rice, white flour, clothes, jewelry, Chinese painting, porcelain?

Just don't invest. Stocks, funds and real estate are far away from them. Just buy some government bonds.

Question 4: What macro policies should be adopted to meet the demand and control deflation? First, the expansionary fiscal policy. * * * Actively expanding fiscal policy can be implemented in two aspects:

1, tax reduction.

2. Increase fiscal expenditure.

Second, expansionary monetary policy. The basic content of expansionary monetary policy is to increase the amount of money in circulation, and the specific policy means include:

1. Buy * * * bonds through the open market and spit out money, thus increasing the money stock in the economic system.

2. Reduce the rediscount rate or refinancing rate of the central bank to financial institutions, reduce the cost of financial institutions, and affect the market interest rate.

3. Reduce the statutory reserve ratio of commercial banks and expand the monetary expansion multiplier, thus expanding the total scale of social credit.

Third, the national debt policy.

Question 5: Solutions to inflation and deflation Inflation: Reducing the circulation of money. Increase the domestic investment rate, increase the employment rate, and increase the interest rate adjustment by banks. Expand consumer groups and levels. Deflation depends on the situation, generally increasing the amount of money. The central bank will lower interest rates and expand currency circulation. Haha, that's all.

Question 6: The difference between inflation and deflation and the countermeasures to be taken. Inflation generally refers to the phenomenon that the money supply exceeds the actual money demand, resulting in a sustained and general increase in prices for a period of time. Its essence is that total social demand is greater than total social supply, and supply is far less than demand.

Deflation: When the currency in circulation in the market decreases, people's monetary income and purchasing power decrease, which affects the price drop and causes deflation. Long-term monetary tightening will inhibit investment and production, leading to increased unemployment and economic recession.

counter-measure

During deflation

1) loose monetary policy

Adopting a loose monetary policy can increase the amount of money in circulation, thus * * * total demand.

slack fiscal policy

Expanding fiscal expenditure can directly increase the total demand, and can also drive the increase of private investment through the "multiplier effect" of investment.

(3) structural adjustment

For deflation caused by absolute overproduction of certain industries or commodities at a certain level, structural adjustment is generally adopted, that is, reducing the output of surplus departments or industries and encouraging the development of emerging departments or industries.

Change expectations

* * * Increase the public's confidence in the future economic development trend through various publicity means.

(5) Improve the social security system.

Establish and improve the social security system, appropriately improve the national income distribution pattern, raise the income level and consumption level of middle and lower class residents, and increase consumer demand.

(6) Malignant contraction model

The national comprehensive price index only issues the currency equivalent to the number of nationals, which leads to the infinite appreciation of the currency, such as the Qi Dao currency in the Warring States period and the legal tender issued by Wang Mang when he usurped the Han Dynasty.

When inflation.

1. Control the money supply.

Because inflation is a monetary phenomenon under the condition of paper money circulation, the most direct reason is that there is too much money in circulation. Therefore, one of the important countermeasures for countries to control inflation is to control the money supply, make it adapt to the money demand, and reduce the pressure of currency depreciation and inflation.

2. Control the total social demand.

For demand-driven inflation, regulating the total social demand is a key. This is mainly achieved through the implementation of correct fiscal and monetary policies. In fiscal policy, it can be achieved by tightening fiscal expenditure, increasing taxes, seeking budget balance and reducing fiscal deficit. In terms of monetary policy, it is mainly to tighten credit, control the money supply and reduce the money supply. The important way to comprehensively control inflation by fiscal policy and monetary policy is to control the total social demand by controlling the scale of investment in fixed assets and the excessive growth of consumption funds.

3. Increase the effective supply of commodities and adjust the economic structure.

Another important aspect of controlling inflation is to increase the supply of effective commodities. The main means are to reduce costs, reduce consumption, improve economic benefits, increase the proportion of input and output, and at the same time adjust the structure of industries and products to support the production of commodities in short supply.

4. Other policies.

Other policies to control inflation include fixed prices, tax cuts and indexation.

Question 7: Analyze how to deal with inflation and deflation from fiscal policy and monetary policy. As two major policies of demand management, monetary policy and fiscal policy regulate aggregate demand by increasing or decreasing money supply, thus solving deflation and inflation.

(1) Policies adopted during deflation:

1, expansionary monetary policy

Adopting a loose monetary policy can increase the currency circulation and national income. When the total demand is insufficient and unemployment increases, the central bank adopts measures such as buying bonds in the open market, lowering the rediscount rate and lowering the deposit reserve ratio to expand the money supply, increase the loan scale and promote economic growth.

2. Expansive fiscal policy

Expanding fiscal expenditure can directly increase the total demand, and can also drive the increase of private investment through the "multiplier effect" of investment. While * * * increasing expenditures or reducing tax rates, we will curb the rise in interest rates, expand credit, and * * * invest in enterprises, thus expanding total demand.

(2) Policies adopted during inflation:

1. Tightening credit policy

When the total expenditure is too large and the price level rises, the central bank will take measures such as selling bonds in the open market, raising the rediscount interest rate and raising the deposit reserve ratio, so as to reduce the money supply and loan scale, control social demand and curb overheated economic growth.

2. Tight fiscal policy

By increasing fiscal revenue or reducing * * * purchases and investments, we will reduce transfer payments and narrow the fiscal deficit.

3. Coordinated fiscal and monetary policies.

Under certain conditions, fiscal policy and monetary policy can be used in reverse according to their functional characteristics. Expansionary fiscal policy helps to overcome the shortage of total demand and economic depression by reducing taxes and increasing expenditures. Tight monetary policy can control the growth of money supply, thus reducing the inflationary pressure brought by expansionary fiscal policy. Tight fiscal policy can reduce the deficit, while expansionary monetary policy can reduce interest rates. While tightening the budget, monetary policy will be loosened, and investment will drive economic development.

Fiscal policy achieves its goal by attracting consumers' investment, while monetary policy achieves its goal by regulating currency circulation. Compared with monetary policy, the implementation of fiscal policy is more difficult, because the overall trend cannot be decided by banks alone, and consumers must cooperate. Although the implementation of monetary policy is relatively easy, on the one hand, it can be implemented from banks, and consumers are forced to make corresponding decisions, so monetary policy will not bring ranking effect. Unilateral policies are generally difficult to achieve corresponding results, so they are generally coordinated.

Tight monetary policy indirectly affects the profit margin of enterprises in the future, because the credit cost of enterprises rises. Interest rates have increased, and the cost of bank loans for real estate developers has increased a little. However, if the house price has been soaring, the increased cost can't be seen at all, and it will be offset at once. There is no direct impact on the stock market, it is indirect, and there must be a process.

After the tightening of monetary policy, it is more complicated whether it can achieve the expected effect in controlling price increases.

Question 8: What kind of fiscal and monetary policies should be adopted in the case of deflation? Fiscal policy operation: 1. In the period of economic expansion, taxes will automatically increase in time, and transfer payments such as unemployment insurance, poverty alleviation and product price support will be reduced, which will help curb inflation; 2. In the period of economic recession, the tax revenue will be automatically and timely reduced, and the increase of various transfer expenditures will help alleviate the economic recession. Therefore, the automatic stabilizer can reduce the fluctuation range of economic cycle, reduce the height of peak and increase the height of valley. Monetary policy operation: 1. When the economic situation tends to be depressed, the central bank can buy * * * bonds in the open market to reduce interest rates and promote economic development; We can expand the credit scale and increase investment by lowering the rediscount rate; Can reduce the deposit reserve ratio, make investment expansion, * * * economic growth. 2. When the economic situation tends to overheat, the central bank can sell bonds in the open market to raise interest rates and curb economic growth; It can increase the rediscount rate and reduce the scale of credit and investment; It can increase the deposit reserve ratio, reduce investment and curb economic growth. Hope to adopt, thank you.