Abstract:
Management of aggregate demand should be positioned in the context of economic restructuring which features consumption upgrading, rise of human capital-intensive industries and reformation of big cities. With economic restructuring, credit demand by capital-intensive enterprises will drop. Human capital-intensive industries' demand for credit is low due to industrial attributes and some regulatory reasons. In the meantime, consumer credit, in particular demand for housing mortgage loans, will rise rapidly. While relying on government expansion without structural reform will not fundamentally resolve the challenges brought by structural transformation, it does not mean that structural reform can replace policies for stabilizing aggregate demand. Also, lower economic growth cannot guarantee improvement in quality. Increasing government debt and fiscal deficits does not necessarily exacerbate risks. Policies for stabilizing aggregate demand should not be abandoned or reduced due to concerns about the housing price bubble.
Keywords: economic restructuring, aggregate demand
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