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Briefly introduce Keynesian theory, and analyze the inflation in China in combination with the actual situation ~!
Keynesian theory: advocates that the state adopts expansionary economic policies to promote economic growth by increasing demand. According to Keynes's economic theory, macroeconomic trends will restrict the specific behavior of individuals. On the other hand, Keynes believed that the reduction of total demand for commodities was the main reason for the economic recession. From this perspective, he believes that measures to maintain the data balance of overall economic activities can balance supply and demand at the macro level. The main conclusion of Keynesian economic theory is that there is no powerful automatic mechanism for the development of production and employment to full employment in the economy.

At present, many people blame the government for rising prices or inflation.

We should look at the following questions:

1, the standard of inflation

2. The real reason for the current price increase.

3. Who is sensitive to rising prices and who is not?

4. Advantages and disadvantages of rising prices.

5. Government efforts

6, the reflection of rising prices.

First, the standard of inflation,

First of all, it should be explained that the economics of studying the relationship between money and goods can be divided into monetary economics and monetary finance, which are all conclusions under the western economic system.

Monetary finance believes that the increase of CPI >: 3% is called inflation, which means inflation;

When CPI & gt5% increases, we call it serious inflation, which means serious inflation.

CPI is the consumer price index, abbreviated as CPI in English, which reflects the price changes of products and services related to residents' lives and is usually used as an important indicator to observe the level of inflation.

By western standards, it must be inflation now.

However, the differences between the eastern and western economic systems determine that these views are not applicable in China! ! ! East and west, the speed of money circulation is much different! ! !

According to monetary economics, inflation stems from the rise of basic commodity prices.

Many so-called "economists" (network self-styled) have adopted this explanation, thus ignoring the root of the problem.

Second, the reasons for the current price increase.

What is the price?

In an independent economy, the price is basically equal to the amount of money in circulation/the amount of goods currently in circulation.

In other words, there are two factors that determine the price: the amount of money in circulation and the amount of goods in circulation.

Then, let's take a look at the situation in China.

Last year, the state vigorously rectified small coal mines, resulting in a sharp drop in coal production, reducing 250 million tons. Interested students can take a look, coal prices have risen a lot.

China has been importing oil to meet the domestic economic development, and the soaring international crude oil prices have reduced domestic crude oil reserves.

With the decrease of the two most important industrial raw materials and energy, the commodities on the market will inevitably decrease.

Last year, China's stock market was booming, and many people took out their savings to invest in the stock and futures markets. Since May, more than 200 billion yuan of money has flowed from banks to investment and circulation fields such as stocks and futures, and large-scale bank lending (the loan plan was completed several months ahead of schedule last year), so the amount of money in circulation has surged.

The decrease of commodities and the surge of currency in circulation will inevitably lead to a sharp rise in prices.

That is, from May last year, with the outflow of bank funds, prices began to rise sharply! ! !

Third, people who really oppose inflation are people with fixed income.

People with a fixed monthly income are most likely to oppose inflation, such as wage earners, civil servants, low-income people and so on.

Their wages did not rise with the price level, so their purchasing power declined.

Perhaps, when the welfare of civil servants is high and inflation is not serious, life has not changed much, but there will still be.

Civil servants are dissatisfied because their original salary can buy 100 Jin of meat, but now they can only buy 90 Jin. They feel that they are losing money. And some of these people who feel that they have lost money will make gray income.

Some people in the working class will think that their labor and income are out of proportion and feel that they have suffered. And some of these people who feel that they have lost will be very passive.

Some people in the subsistence allowance will think that their treatment is not as good as before, and they feel that they have suffered. Some of these people feel that they have lost money and will go to the pit to kidnap.

Those college students with fixed living expenses will shout a few words out of "speaking for the people" at first, but when the living expenses increase, they are numb to inflation.

What is really insensitive to inflation is people engaged in business, because their income can go up.

It can be said that the more developed a country's private economy is, the stronger its ability to resist inflation.

In the United States, the inflation rate reached 14% in 1974 and1982, and the average in other years was around 5%. Inflation in the United States is normal, but almost everyone in the United States is a speculator, so most Americans are not afraid of inflation.

Americans, almost everyone is a speculator, investing in stocks and futures funds far exceeds savings.

Fourth, the pros and cons of inflation.

Appropriate inflation is conducive to stimulating economic development. The way to stimulate the economy adopted by the major western capitalist countries is to increase the government fiscal deficit and stimulate economic growth through the government deficit, which Keynes advocated.

Inflation will evaporate people's savings invisibly, so Americans like to invest. All-people investment can not only offset the harm caused by inflation to some extent, but also promote the development of American economy.

But rising prices are also a challenge to social morality, because some people with unbalanced mentality will use this as an excuse to do things that challenge the bottom line of social morality. So the crime rate in the United States is also very high.

As for the Clinton administration, why is the economy growing at a high speed and the crime rate falling? There are many reasons, so I won't go into them here. Interested students can trust me privately.

Accordingly, if deflation and prices fall, it will not be conducive to economic development, because it will dampen the labor enthusiasm of producers.

Although as individuals, ordinary people hope so.

Since China's reform and opening up, deflation has only occurred in 1992, which is the result of the central government's efforts to make the economy soft landing. -I was only 8 years old at that time, and I thought sugar was cheap that year.

Verb (abbreviation for verb) The efforts made by the government:

Why should we curb inflation? Because excessive inflation is a symptom of a large number of economic bubbles.

Economic bubble is an inevitable by-product of economic development, and many people can see the harm of bubble economy to the economy.

During the Southeast Asian financial crisis, the central government threw out a large amount of foreign exchange reserves to ensure that the RMB would not depreciate! ! !

Now the central government is trying to reduce the amount of money in circulation, raise interest rates and tighten the money supply, because small coal mines can no longer be opened, and the international oil price is beyond our decision.

The "temporary price-intervention Measures" currently adopted by the government are opposed by many "economists" because the government can't interfere with prices strictly according to the requirements of the market economy.

However, China's market economy is "a market economy with China characteristics", so this measure will be taken to ensure people's lives. It's not that the officials who formulated the "temporary price-intervention Measures" don't understand economics, but that they have to do so! ! !

Fearing that the "temporary price-intervention Measures" will accidentally harm the economy, the measures also stipulate that provinces can decide the scope and time of application of the "temporary price-intervention Measures" according to actual conditions.

And many people don't know about the efforts made by these central governments! ! !

In the face of rising prices, what should we pay attention to most? Government or individual, others or themselves, economy or morality?