What policies does macroeconomics have to promote economic growth?

Macroeconomic policies to promote economic growth mainly include:

1. Improve the quantity and quality of labor force, such as birth policy and immigration policy. Ways to increase the labor force include increasing the birth rate and encouraging immigrants to enter the country. The way to improve the quality of labor force is to increase investment in human capital. Stimulate economic growth through labor force.

2. Capital accumulation, such as active monetary policy and tax policy. Capital accumulation mainly comes from savings, and people can be encouraged to save by reducing taxes and raising interest rates.

3. Technological progress, such as various technical support policies. Technological progress is playing an increasingly important role in modern economic growth. Therefore, promoting technological progress has become the focus of economic policies in various countries.

4. Balanced growth in a planned way. In modern economy, the coordinated growth among various departments is required by the economy itself, and the national planning and coordination should be achieved through indirect means.

5. Improve the money supply, which is manifested in open market purchase, reducing the discount rate and reducing the statutory reserve ratio. The above policies can promote economic growth in the short term.

The theoretical basis of macroeconomic policy is the theory that the total demand of Keynesian economics determines the national income, that is, the IS-LM model. The model explains how the interest rate and national income are determined when the commodity market and the money market reach equilibrium at the same time, and points out what influence the position change of the IS curve and LM curve in the model will have on the balanced interest rate level and national income level. This model is a tool to analyze the effects of fiscal policy and monetary policy.

In different regions of LM curve, the effectiveness of fiscal policy and monetary policy varies greatly. LM curve can be presented in three forms: horizontal, incremental and vertical. Accordingly, LM curve can be divided into Keynesian area (depression area), middle area and classical area.

The selection principle of macroeconomic policy is: treat the symptoms if it is urgent, treat the root cause if it is slow, and treat both the symptoms and the root causes.

Macro-economic policy is a short-term policy to adjust the macro-economic operation, which needs to be adjusted according to the change of the situation, not long-term, because the economic situation is constantly changing. Today, with the development of economic globalization, the economic situation of a country depends not only on the domestic economic trend, but also on the global economic trend to a considerable extent.

"Treating the symptoms when urgent" refers to the use of fiscal and monetary macroeconomic policies to deal with short-term economic problems, such as stimulating economic growth, preventing deflation, and coping with external shocks. "Slow down and cure the problem" refers to dealing with long-term economic problems through structural policies and economic reforms, such as adjusting economic structure, promoting technological progress, improving economic efficiency, achieving sustainable development, and actively participating in the global economy. Because China's economic development prospects largely depend on the policy mix that conforms to the medium and long-term strategy.

It is generally believed that macroeconomic policies have four main objectives:

1, sustained and balanced economic growth;

2. Full employment

3. The price level is stable;

4. Balance of payments.

References:

Baidu Encyclopedia-Macroeconomic Policy