Rethinking China’s Macroeconomic Policy

Academic Division of Economics, Chinese Academy of Social Sciences, Beijing, China

Abstract:  Six years have passed since the global financial crisis began. Yet, mainstream economists are still far from reaching a consensus on a framework for restructuring macroeconomic policy. In April 2013, many top scholars attended the International Monetary Fund’s (IMF) second conference on “Rethinking Macro Policy”. During the conference, the following basic assessments with respect to macroeconomic policy were reached: economists and policy-makers have entered a “brave new world” where they face more problems than effective solutions and the image of a new macroeconomic policy framework remains opaque. Based on discussions at the conference and the dissertations of important scholars over recent years, this paper provides a systematic review of the reflections of mainstream economic academia regarding the restructuring of a macroeconomic policy framework, with a view to providing an orientation to China’s on-going reform of macroeconomic regulation.
Keywords: financial crisis, macro-regulation, monetary policy, fiscal policy, industrial policy, supply and demand management, excess capacity, micro-regulation, balance sheet.