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| Author: | Su, Jian |
| Title: | Does reducing interest rate help settle the problem of unemployment in China? (original in Chinese) |
| Journal: | Economic Research Journal (c)
1998 : 10, p.37-41 |
| Index terms: | INTEREST RATES UNEMPLOYMENT CHINA |
| Language: | chn |
| Abstract: | The substitution effect of low interest rate policy far exceeds the demand effect. It will not help settle the problem of employment in China. Therefore, we should take the macro economic policy in which the relative scarceness of factors can be incorporated, that is, tight monetary policy and loose fiscal policy: The tight monetary policy can make factors keep rational price ratios. On the one hand, it may impel enterprises to use more labour force. On the other hand, it may give scope to China's comparative advantages and enhance the international competitiveness of China's products, thus increasing export and external demand. The loose fiscal policy may increase the total demand directly, thus creating employment. |
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