Empirical study on the effect of macroeconomic policy before and after China's accession to the WTO: The comparison based on IS-LM model

Abstract

Monetary policy and fiscal policy are two major macroeconomic regulatory approaches in the context of market economy. In this paper, we did empirical study on the effects of monetary policy and fiscal policy in stimulating China's national economy growth based on IS-LM model. In addition, we also tried to find out if there are changes in the effects of monetary policy and fiscal policy before and after China's accession to the WTO by making use of China's macro-economical data in the past thirty-two years, and exploring the influence of macroeconomic policies to national economy under different degree of openness. The conclusions we made in this paper will provide theoretical analysis and empirical test basis for China's macroeconomic regulatory policies.