Abstract: To solve the problems of weak markets and overproduction, we can not just rely on expanding demand and injecting money. For the root causes of the current economic problems are both demand deficiency and structural supply imbalance. The expansion of demand is unable to change the situation of coexistence of supply surplus and deficiency. With the lag of institutional reform and mechanism conversion, an over-all demand expansion could drive overlapping productions and even induce inflation. The combination of demand expansion and structural adjustment is a way to tackle economic excess. The supply management policy aimed at pumping effective supply is to promote investment, technical innovations and structural readjustment of advantageous enterprises. The government should give policy support to those selected important enterprises, to raise their competence and to realize the real increase of effective supply.
Publication Year: 2000
Publication Date: 2000-01-01
Language: en
Type: article
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