[Written in front] In recent weeks, “monetization of fiscal deficits” has become a hot topic in the domestic financial industry. The background of this hot discussion is under the new coronavirus epidemic, what policy combination should we use to deal with this “unprecedented challenge”? Is it “full firepower” like the major developed countries in Europe and America, or is it a calm response to continue the existing policy framework?
Surging News conducted an in-depth discussion with economists and market participants on this issue: What does it mean to “monetize the fiscal deficit”? What problems can be solved? What are the disadvantages? We aim to objectively present the trend of multi-party contention to help identify the value and cost of different policy choices.
Since April 27, Liu Shangxi, Dean of the China Academy of Fiscal Sciences, put forward the idea of monetizing the fiscal deficit, it has quickly sparked heated discussions. In less than a month, it triggered a multi-party debate. Despite differences among the parties, there is no lack of consensus.
According to the multi-views interviewed by Peng Mei News, whether or not they support deficit monetization, they all agree that the coordination of fiscal policy and monetary policy should be strengthened; at the same time, fiscal Economic efficiency also promotes social equity.
Under the impact of the epidemic, China is facing severe employment pressure. How to realize the “six guarantees” is currently a major proposition. The “six guarantees” require reporting to residents for employment, ensuring basic livelihoods, and protecting market players. This requires fiscal policy to play its role of taking into account social equity, as well as the corresponding coordination of monetary policy.
In the past week, Surging News has interviewed Liu Shangxi, Dean of the Chinese Academy of Finance Sciences, Lu Ting, Chief Economist of China Nomura Securities, and Yao, Dean of the National Development Institute of Peking University Yang Xian Ziqiang, China ’s chief economist at Morgan Stanley, and Chen Xian, a professor at the Antai College of Economics and Management at Shanghai Jiao Tong University, author of the book “The Miracle of Growth”, and China Construction Bank Zhang Tao also wrote for Surging News. The ten major controversial points of the surging news inventory are as follows:
1. Definition and scope of monetization of fiscal deficits
1. Definition and scope of monetization of fiscal deficits
Liu Shangxi: The central bank can provide 5 trillion yuan in mint tax to purchase treasury bonds The method of financial financing can be implemented in stages without having to be in place at once. This is more advantageous than issuing 5 trillion yuan in bonds to the market, or levying 5 trillion yuan in taxes in the future. The “People’s Bank of China Law” may be revised in due course.
Lu Ting: In order to issue special treasury bonds to the market on a trial basis, market institutions such as commercial banks and insurance companies first absorb these treasury bonds. In the future, the central bank will purchase these special treasury bonds through open market operations based on market interest rates , So as to achieve the purpose of curbing market interest rates. It is possible to circumvent the problem of the central bank buying special government bonds and violating the People’s Bank of China Law, and it is also possible to test the credit demand in the market and the total demand in the economy.
Lu Ting: In order to issue special treasury bonds to the market on a trial basis, market institutions such as commercial banks and insurance companies first absorb these treasury bonds. In the future, the central bank will purchase these special treasury bonds through open market operations based on market interest rates , So as to achieve the purpose of curbing market interest rates. It is possible to circumvent the problem of the central bank buying special government bonds and violating the People’s Bank of China Law, and it is also possible to test the credit demand in the market and the total demand in the economy.
In the current special economic environment, referring to the Bank of Japan ’s approach, to a certain extent, targeting long-term government bond yields is a policy option that can be referenced.
Yao Yang: It is illegal to let the central bank directly buy special government bonds. There are laws there, I do n’t think it ’s necessary.
Zhang Tao: The “monetization of deficit” in this round of discussion refers to the direct issuance of government bonds to the People’s Bank (another expression of this meaning is that the People’s Bank directly subscribes to government bonds in the primary market). As the current Article 29 of the People ’s Bank of China Law clearly states that “The People ’s Bank of China shall not overdraft government finances, and shall not directly subscribe or underwrite government bonds and other government bonds.”
Yao Yang: It is illegal to let the central bank directly buy special government bonds. There are laws there, I do n’t think it ’s necessary.
Zhang Tao: The “monetization of deficit” in this round of discussion refers to the direct issuance of government bonds to the People’s Bank (another expression of this meaning is that the People’s Bank directly subscribes to government bonds in the primary market). As the current Article 29 of the People ’s Bank of China Law clearly states that “The People ’s Bank of China shall not overdraft government finances, and shall not directly subscribe or underwrite government bonds and other government bonds.”
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Xing Ziqiang: Everyone thinks that the monetization of deficits means that the central bank directly goes to the primary market to subscribe for government bonds. Although European and American economies adopted a significantly loose monetary policy this time, most of them only bought government bonds in the secondary market, and did not go directly to the primary market. There are also some emerging markets around China. For example, the Central Bank of Indonesia goes directly to the primary market to buy government bonds. This is the typical monetization of the deficit. Emerging markets adopt this approach, which is more likely to cause an impact on their currency credit.
2. Banknote printing must equal incontinence?
Xing Ziqiang: Everyone thinks that the monetization of deficits means that the central bank directly goes to the primary market to subscribe for government bonds. Although European and American economies adopted a significantly loose monetary policy this time, most of them only bought government bonds in the secondary market, and did not go directly to the primary market. There are also some emerging markets around China. For example, the Central Bank of Indonesia goes directly to the primary market to buy government bonds. This is the typical monetization of the deficit. Emerging markets adopt this approach, which is more likely to cause an impact on their currency credit.
2. Banknote printing must equal incontinence?
Liu Shangxi: Deficit does not mean unlimited, everything has a degree. The Chinese pay attention to everything, but things must be reversed. Will the monetization of the deficit inevitably be an excessive operation? It was just an imagination.
Yao Yang: Historically, there has been a lot of cases of ruining a country ’s political power because of excessive currency. This is the case in the Yuan Dynasty. The Northern Song Dynasty invented paper money, and in the Yuan Dynasty it began to randomly print money. Because this was the easiest way to get money, the Yuan Dynasty collapsed. Nationals during the three-year liberation warThe party also randomly issued currency. The Kuomintang encountered difficulties in recruiting soldiers, and just started to distribute land as an incentive mechanism. Later, when the land was separated, the cows were sent, and the cows were gone, so they directly paid the people. So the central bank over-printed the banknotes and the Ministry of Finance overdrawn. The end result is that the gold coupons are worthless, and then hyperinflation. This is also a very important reason for the collapse of the Kuomintang government. We obviously cannot go that way anymore. There are also examples from foreign countries. Latin America has been suffering from hyperinflation for a long time because they are issuing money indiscriminately.
Lu Ting: The so-called monetization of the fiscal deficit, there are many countries that do so, some have succeeded or some have not. What a country is most afraid of is that the government does not exercise restraint in printing money, and finally there is a problem. This situation has abounded in history. To sum up, there are two points: first, many governments in history have indeed monetized deficits at special moments, and in the end there were no such big problems. Second, as I said just now, our country has actually been monetized in the past few years With some deficits, the sky did not fall. I think the key to this is to pay attention to moderation and try to spend as much money as possible.
Yao Yang: Historically, there has been a lot of cases of ruining a country ’s political power because of excessive currency. This is the case in the Yuan Dynasty. The Northern Song Dynasty invented paper money, and in the Yuan Dynasty it began to randomly print money. Because this was the easiest way to get money, the Yuan Dynasty collapsed. Nationals during the three-year liberation warThe party also randomly issued currency. The Kuomintang encountered difficulties in recruiting soldiers, and just started to distribute land as an incentive mechanism. Later, when the land was separated, the cows were sent, and the cows were gone, so they directly paid the people. So the central bank over-printed the banknotes and the Ministry of Finance overdrawn. The end result is that the gold coupons are worthless, and then hyperinflation. This is also a very important reason for the collapse of the Kuomintang government. We obviously cannot go that way anymore. There are also examples from foreign countries. Latin America has been suffering from hyperinflation for a long time because they are issuing money indiscriminately.
Lu Ting: The so-called monetization of the fiscal deficit, there are many countries that do so, some have succeeded or some have not. What a country is most afraid of is that the government does not exercise restraint in printing money, and finally there is a problem. This situation has abounded in history. To sum up, there are two points: first, many governments in history have indeed monetized deficits at special moments, and in the end there were no such big problems. Second, as I said just now, our country has actually been monetized in the past few years With some deficits, the sky did not fall. I think the key to this is to pay attention to moderation and try to spend as much money as possible.
Why are some countries not doing well? There are three reasons. First, there is too much printing without restraint. Like Venezuela, Zimbabwe, etc. Second, it can be used only in extraordinary times. When the economy returns to normal, it should be withdrawn as soon as possible. When using it, pay attention to fairness and efficiency. Third, special care must be taken when borrowing foreign debt.
3. What do you think of the current situation?
3. What do you think of the current situation?
Liu Shangxi : Two “unprecedented” mentioned in the April Politburo meeting: “A sudden new crown The pneumonia epidemic has brought an unprecedented impact on China’s economic and social development. “The challenges facing the current economic development are unprecedented.” The central authorities’ judgment on the situation is “unprecedented.” Such wording shows how severe the situation is. Therefore, we cannot think according to the old policy framework and the original policy path, otherwise, it will not match the situation judged by the central research.
Zhang Tao: At the logical level, the current “monetization of the deficit” has become a realistic policy choice, neither conditional nor necessary; from a practical level, following the April 17 Politburo meeting, The Politburo meeting on 15th emphasized once again that the “active fiscal policy should be more active and promising, and the prudent monetary policy should be more flexible and appropriate”. The “double loose” combination orientation has been excluded.
4. Is PSL a real fiscal deficit monetization
Zhang Tao: At the logical level, the current “monetization of the deficit” has become a realistic policy choice, neither conditional nor necessary; from a practical level, following the April 17 Politburo meeting, The Politburo meeting on 15th emphasized once again that the “active fiscal policy should be more active and promising, and the prudent monetary policy should be more flexible and appropriate”. The “double loose” combination orientation has been excluded.
4. Is PSL a real fiscal deficit monetization
Lu Ting: China has experienced some substantial deficit monetization in the past decade After 2015, the essence of the monetized shantytown reform supported by the central bank through mortgage supplementary loans (PSL) was the monetization of the deficit. In addition, the actual local government debt is also much higher than the explicit debt. Because of the rigid payment problem, many of these debts have been or will be monetized in the future. To support a certain degree of “deficit monetization” is to put implicit policy operations on the table.
Zhang Tao: As one of the People ’s Bank refinancing tools, PSL is not a “monetization of deficit”. In Article 23 of the current “People’s Bank of China Law”, the People’s Bank of China can use monetary policy tools to implement monetary policy, including loans to commercial banks and other monetary policy tools determined by the State Council. This is the legal basis for the PSL created by the People’s Bank of China. PSL refers to the special loan provided by the People’s Bank of China to financial institutions in support of key areas, weak links and social undertakings approved by the State Council.
5. Is the local government debt a problem?
Zhang Tao: As one of the People ’s Bank refinancing tools, PSL is not a “monetization of deficit”. In Article 23 of the current “People’s Bank of China Law”, the People’s Bank of China can use monetary policy tools to implement monetary policy, including loans to commercial banks and other monetary policy tools determined by the State Council. This is the legal basis for the PSL created by the People’s Bank of China. PSL refers to the special loan provided by the People’s Bank of China to financial institutions in support of key areas, weak links and social undertakings approved by the State Council.
5. Is the local government debt a problem?
Liu Shangxi: The finances have actually reached a very difficult point. Under the impact of the epidemic, the tax revenue in various places Significant decline. In more than half of the provinces, the local fiscal revenue fell by more than 10%, and at the same time there was a lot of rigid expenditure, such as fighting the epidemic, helping enterprises and poor families, and issuing consumer vouchers in order to restore the economy in some areas. These are the money that must be spent. In this situation, local expenditures are becoming rigid and incomes are decreasing sharply. The risk of local debt has not really been resolved. It is still there. This is an institutional issue. I originally hoped that it would take time to slowly resolve, but the epidemic was unexpectedly struck, and did not give us this time. Now the local government is overwhelmed and can only take advantage of the situation. Increase the central government’s transfer payment, but where does the central government’s money come from? The national fiscal revenue is shrinking sharply and can only be compensated by issuing national bonds.
Lu Ting: Over the past decade or so, local government financing platforms have accumulated a large amount of debt. The newly added platform bond financing in the first four months of this year has reached one trillion yuan. If rigid payment is an objective fact, what is the nature of these platforms’ debtWhat? Especially if the central bank releases funds to commercial banks through some channels, and these commercial banks provide funds to these platforms in various ways. What is the nature of this kind of borrowing? So I want to emphasize here that the substance is more important than the form. . The monetization of the fiscal deficit cannot only be based on the central government’s national debt and the base currency issued by the central bank. In terms of debt, we also need to see a large number of explicit and implicit debts of local governments; in terms of currency, we must not only see the base currency, but also the broad currency, we must also see that the government has just changed the nature of the debt. The role played.
6. Whether the quantity theory of money is outdated
Lu Ting: Over the past decade or so, local government financing platforms have accumulated a large amount of debt. The newly added platform bond financing in the first four months of this year has reached one trillion yuan. If rigid payment is an objective fact, what is the nature of these platforms’ debtWhat? Especially if the central bank releases funds to commercial banks through some channels, and these commercial banks provide funds to these platforms in various ways. What is the nature of this kind of borrowing? So I want to emphasize here that the substance is more important than the form. . The monetization of the fiscal deficit cannot only be based on the central government’s national debt and the base currency issued by the central bank. In terms of debt, we also need to see a large number of explicit and implicit debts of local governments; in terms of currency, we must not only see the base currency, but also the broad currency, we must also see that the government has just changed the nature of the debt. The role played.
6. Whether the quantity theory of money is outdated
Xing Ziqiang: “The quantity theory of money” is derived from a basic identity (MV = PQ) To discuss whether it can effectively explain the money supply and inflation, it depends on whether other variables of the identity can remain stable. During QE, a large amount of currency lay in the financial system in the form of excess reserves, and the currency multiplier fell. Therefore, a sharp increase in the amount of money did not cause inflation. Whether it is “effective” depends on changes in constraints. Several rounds of QE after 2008 did not cause inflation, due to a significant slowdown in currency circulation due to factors such as a substantial increase in excess reserves. However, the impact of the New Coronavirus epidemic will bring great changes to the world. In this crisis, major developed countries have launched massive fiscal stimuli in the face of the epidemic, and strengthened fiscal and currency coordination. The currency circulation rate may not continue to decline, and the stimulus is easy to release. Close. More importantly, the long-term structural deflation factors (3T, that is, globalization of trade, technology dominance, and mega-enterprise) of the past 30 years will be reversed after this round of epidemic, superimposing cyclical factors. Global inflation will be in 2022 May make a comeback.
Chen Xian: The “quantity of money” is basically outdated. Because according to the formula of the quantity of money, MV = PQ (money supply volume × currency circulation speed = price level × commodity transaction volume). Q originally mainly referred to commodities. Xu Jiadong (former doctor of economics at Stanford University in the United States, specializing in currency theory and policy, international trade and monetary finance), the former head of the financial department in Taiwan, once pointed out during a lecture at Shanghai Jiaotong University that Q should be divided into Q1 and Q2. Q2 is an asset, otherwise many things are difficult to understand. It turns out that Q refers to a broad sense of commodities, but does not include assets. So the formula for the amount of money may be outdated, because the amount of money deposited on assets is more than the amount of money deposited on commodity exchanges.
7. Will the monetization of the deficit cause inflation
Chen Xian: According to the identity of the quantity of money, first of all, we assume that V / currency circulation rate is constant in the short term. After China’s reform and opening up, M2 grew rapidly, and no serious inflation occurred. Perhaps, the decline in China ’s currency circulation is the reason for the not dramatic fluctuations in inflation. Secondly, the entire production pattern has changed a lot, and there has been a global situation from production shortage to overcapacity. In this case, it is difficult to raise commodity prices. But even if there is an inflation hazard, the problem to be solved now is more serious than inflation.
Chen Xian: The “quantity of money” is basically outdated. Because according to the formula of the quantity of money, MV = PQ (money supply volume × currency circulation speed = price level × commodity transaction volume). Q originally mainly referred to commodities. Xu Jiadong (former doctor of economics at Stanford University in the United States, specializing in currency theory and policy, international trade and monetary finance), the former head of the financial department in Taiwan, once pointed out during a lecture at Shanghai Jiaotong University that Q should be divided into Q1 and Q2. Q2 is an asset, otherwise many things are difficult to understand. It turns out that Q refers to a broad sense of commodities, but does not include assets. So the formula for the amount of money may be outdated, because the amount of money deposited on assets is more than the amount of money deposited on commodity exchanges.
7. Will the monetization of the deficit cause inflation
Chen Xian: According to the identity of the quantity of money, first of all, we assume that V / currency circulation rate is constant in the short term. After China’s reform and opening up, M2 grew rapidly, and no serious inflation occurred. Perhaps, the decline in China ’s currency circulation is the reason for the not dramatic fluctuations in inflation. Secondly, the entire production pattern has changed a lot, and there has been a global situation from production shortage to overcapacity. In this case, it is difficult to raise commodity prices. But even if there is an inflation hazard, the problem to be solved now is more serious than inflation.
Xing Ziqiang: The “quantity theory of money” is derived from a basic identity (MV = PQ), discussing whether it can be effectively explained Money supply and inflation depend on whether other variables in the identity can remain stable. During the period of quantitative easing (QE), a large amount of currency lay in the financial system in the form of excess reserves, and the currency multiplier decreased. Therefore, a sharp increase in the amount of money did not cause inflation. The long-term structural deflation factors of the past 30 years (3T, that is, globalization of trade, technology dominance, and mega-enterprise) have suppressed inflation, promoted productivity, and created the golden age of global companies. However, this trend will be reversed after this round of epidemic, superimposed on cyclical factors, and global inflation may make a comeback in 2022.
8. Is the special national debt used to protect basic livelihoods and cash, or is it used for investment and productivity improvement?
Lu Ting: Now too few people talk about the fairness of fiscal policy. We talk about a lot of new infrastructure, a lot of subsidies, and a lot of demand. However, in the “six guarantees”, we have not done enough to protect basic people’s livelihood, protect market players, and maintain grassroots operations. From this perspective, I strongly support Dean Liu Shangxi’s views, and many of them are my own.
8. Is the special national debt used to protect basic livelihoods and cash, or is it used for investment and productivity improvement?
Lu Ting: Now too few people talk about the fairness of fiscal policy. We talk about a lot of new infrastructure, a lot of subsidies, and a lot of demand. However, in the “six guarantees”, we have not done enough to protect basic people’s livelihood, protect market players, and maintain grassroots operations. From this perspective, I strongly support Dean Liu Shangxi’s views, and many of them are my own.
Xing Ziqiang: The current megatrend is very different from the reconstruction after World War II. Due to the new trend of thought now: de-globalization, de-domination of technology, and de-giantization of enterprises, will lead to a stage of economic policy civilianization. In the reconstruction after World War II, a large part of the funds were used for infrastructure construction and investment in public resources that are conducive to long-term productivity. This is very different from the current. This policy trend accelerated after the epidemic may be a long-term debt expansion and transfer payments to the people, conforming to the current populist trend of thought, rather than increasing labor productivity. Whether it is a special countryEither debt or special infrastructure debt, most of it is still used in some directions that can really increase long-term productivity. For example, investment in a new generation of digital infrastructure, education and public health systems. From this point of view, compared with the normalized trend of transfer payments to the public in the West, the combination of Chinese fiscal policies is still helpful for long-term productivity.
Chen Xian: I suggest that farmers, migrant workers, and low-income people in cities and towns pay 10,000 yuan each. Of course, there will definitely be objections, saying that some poor people get money and save it. How can I save money now? Of course you have to go to dinner first. Sending this money also has a certain effect on promoting consumption. Monetization of the deficit as a policy reserve can meet this demand. This is because protecting the basic livelihood of the “six guarantees” is probably the most important thing at present.
9. Independence of the central bank and national interests
Liu Shangxi: In the face of national interests, there is no departmental interest. If we still talk about departmental interests in front of national interests, we have no overall view, which is contrary to the central government’s repeated talk of “big picture awareness.” Proposing a moderate deficit monetization proposal is by no means representative of any department’s interests. It is just a proposal of a scholar on a new fiscal and monetary policy combination. The independence of the central bank as an institution and the independence of monetary policy are relative. The independence of the central bank still depends on the overall needs of the country. The central bank is not a “country in a country”. On the surface, our central bank appears to be an administrative agency of the State Council. In fact, it is outside the national budget system and earns its own money. It is more like a central enterprise. At this point, it is a bit like a foreign central bank that operates as a public company. In this regard, the independence of our central bank is actually very strong.
Lu Ting: Regarding the independence of the central bank, the central bank is actually a government department in almost all countries. The so-called central bank independence has slowly developed over the past few decades. At this point, modern currency theory is not wrong, it describes some of the most basic functions of the central bank. Why have we increasingly emphasized the independence of central banks in the past few decades? In fact, it is emphasizing that for a government, fiscal expenditure needs certain restrictions, and it cannot be chaotic. However, when the country is in an extraordinary state, whether it is under a huge impact or a state of war, the central bank is a component of the government to assist the government in financing and provide liquidity. This is undoubtedly not too dogmatic.
Yao Yang: What is national interest? The definition of the so-called national interest is very vague, and it must be implemented to who is making the decision. For example, in the case of the United States, Trump said that he wants to improve the economy. This is national interest. But we all know that he is for re-election. So it is difficult to define what is national interest. I am certainly not saying that the independence of the central bank will absolutely not allow discussion, but there must still be a firewall. Money is money, and finance is finance, otherwise there will be many problems.
10. Controversy of theory
Chen Xian: I suggest that farmers, migrant workers, and low-income people in cities and towns pay 10,000 yuan each. Of course, there will definitely be objections, saying that some poor people get money and save it. How can I save money now? Of course you have to go to dinner first. Sending this money also has a certain effect on promoting consumption. Monetization of the deficit as a policy reserve can meet this demand. This is because protecting the basic livelihood of the “six guarantees” is probably the most important thing at present.
9. Independence of the central bank and national interests
Liu Shangxi: In the face of national interests, there is no departmental interest. If we still talk about departmental interests in front of national interests, we have no overall view, which is contrary to the central government’s repeated talk of “big picture awareness.” Proposing a moderate deficit monetization proposal is by no means representative of any department’s interests. It is just a proposal of a scholar on a new fiscal and monetary policy combination. The independence of the central bank as an institution and the independence of monetary policy are relative. The independence of the central bank still depends on the overall needs of the country. The central bank is not a “country in a country”. On the surface, our central bank appears to be an administrative agency of the State Council. In fact, it is outside the national budget system and earns its own money. It is more like a central enterprise. At this point, it is a bit like a foreign central bank that operates as a public company. In this regard, the independence of our central bank is actually very strong.
Lu Ting: Regarding the independence of the central bank, the central bank is actually a government department in almost all countries. The so-called central bank independence has slowly developed over the past few decades. At this point, modern currency theory is not wrong, it describes some of the most basic functions of the central bank. Why have we increasingly emphasized the independence of central banks in the past few decades? In fact, it is emphasizing that for a government, fiscal expenditure needs certain restrictions, and it cannot be chaotic. However, when the country is in an extraordinary state, whether it is under a huge impact or a state of war, the central bank is a component of the government to assist the government in financing and provide liquidity. This is undoubtedly not too dogmatic.
Yao Yang: What is national interest? The definition of the so-called national interest is very vague, and it must be implemented to who is making the decision. For example, in the case of the United States, Trump said that he wants to improve the economy. This is national interest. But we all know that he is for re-election. So it is difficult to define what is national interest. I am certainly not saying that the independence of the central bank will absolutely not allow discussion, but there must still be a firewall. Money is money, and finance is finance, otherwise there will be many problems.
10. Controversy of theory
Yao Yang: The basis of “monetization of deficit” is still modern currency theory. The problem is that modern currency theory is not a systematic theory. Its theory is that debt and currency are equivalent, and the currency in the modern banking system is fiat currency. Fiat currency can have no value attribution, so the fiscal deficit can be developed indefinitely. In theory, it is wrong to confuse currency and government debt.
Keynes never let everyone spam. Keynes’s theory is a kind of depression economics, which can work during depression, and it is also limited. His theory holds that monetary policy and fiscal policy are used to counter cycles, and that they should not be done after the depression cycle, and cannot issue currencies without restraint. Keynes never talked about encouraging currency issuance. If someone quotes this famous quote, it is to make excuses for the Fed.
Chen Xian: “Monetization of deficits” is a policy reserve under the current situation of last resort, and is fully applicable to the “camera choice” in Keynesianism. According to Keynesianism, right and wrong policy choices are ultimately answered by time, not by any theory that can be answered in advance. Under the impact of the epidemic, many low-income people are already facing pressure on their lives. If they still apply any theory and experience at this time, they will not be able to solve the problem without making choices. However, we also need to see the unique resilience of China’s economy, which may be able to slow down after a while. According to Keynesianism, it is ultimately time to answer, not to say which theory can answer this question.
Chen Xian: “Monetization of deficits” is a policy reserve under the current situation of last resort, and is fully applicable to the “camera choice” in Keynesianism. According to Keynesianism, right and wrong policy choices are ultimately answered by time, not by any theory that can be answered in advance. Under the impact of the epidemic, many low-income people are already facing pressure on their lives. If they still apply any theory and experience at this time, they will not be able to solve the problem without making choices. However, we also need to see the unique resilience of China’s economy, which may be able to slow down after a while. According to Keynesianism, it is ultimately time to answer, not to say which theory can answer this question.