How to combine the current proactive fiscal policy with the prudent monetary policy? Why is this combination?

The so-called combination here means to use it together and at the same time. Because fiscal policy and monetary policy have different effects in solving different problems, they will not be used at the same time unless there are serious problems in the economy. In fact, if the economy can operate normally, the government will not interfere in the economy and will not take the initiative to use fiscal and monetary policies.

The active fiscal policy and prudent monetary policy currently used are based on two considerations.

First of all, the persistent external economic weakness, especially the economic recession in Europe and America, has a great impact on China's economic development. As we all know, the three troikas that drive China's economic development are consumption, investment and export. Different from the consumption-driven development model of major developed countries, China's exports account for a large proportion of the total economic output, so once there is a problem with exports, the economy will inevitably slow down. Therefore, in order to ensure the steady and rapid economic development, the government has adopted a proactive fiscal policy. On the one hand, it promotes domestic consumption by subsidizing and promoting household appliances and cars to the countryside. On the other hand, it promotes economic growth through direct investment projects.

Secondly, China is currently facing serious inflationary pressure. Inflationary pressure may come from three aspects, one of which is imported inflationary pressure. Because many countries in the world are now facing inflation, and there is the possibility of global inflation, coupled with the weak economy of the United States, a series of quantitative easing monetary policies have been adopted in an attempt to stimulate the economy at the expense of inflation, so a large number of dollars have been issued, which has caused the prices of bulk commodities to rise too fast and brought serious imported inflationary pressure to China; Secondly, due to natural disasters and other reasons, food prices have risen rapidly in China, and various economic imbalances have also brought considerable inflationary pressures; Third, we have to say that the dangers of hot money, excessive hot money, "you play with beans", "you are cruel to me" and "sugar is expensive" have caused great harm to the economy and directly caused inflationary pressure. Therefore, the government adopted a so-called prudent monetary policy. Although it is stable, monetary policy has been obviously tight this year. From raising interest rates to raising the deposit reserve ratio, the government attaches importance to controlling inflation.

Generally speaking, fiscal policy is very effective in stimulating the economy when the economy is in recession, and monetary policy is very effective in controlling inflation. At present, there is both the danger of economic downturn and inflationary pressure, so we must combine a proactive fiscal policy with a prudent monetary policy. It should be noted that the word "prudent" is added to the government's monetary policy instead of "tight", which may be due to the situation that monetary policy is tight first and then loose throughout the year. If inflationary pressure falls in July and August, the government may loosen monetary policy. After all, the continuous tightening of monetary policy has an inhibitory effect on economic development.