The supply side and what are the two basic means of managing and regulating macroeconomics

The supply side and the demand side are the two basic means of managing and regulating the macroeconomy.

1. Supply-side reform

Supply-side reform is proposed after an in-depth analysis of the problems existing in our country's economy. It aims to optimize the supply structure, expand the scale of supply, and improve the quality of supply. To improve economic aggregate and efficiency in many aspects. The reform covers many areas, including cutting overcapacity, destocking, reducing costs, and making up for shortcomings.

Among them, overcapacity reduction is to remove overproduction and low-end production capacity, reduce market competition pressure in various industries, and accelerate the transformation and upgrading of traditional industries; destocking mainly targets real estate, bond and other markets to effectively alleviate market risks; and Cost reduction mainly improves the production efficiency of enterprises by promoting measures such as streamlining administration and delegating power, reducing burdens and increasing efficiency.

Supply-side structural reform aims to adjust the economic structure to achieve optimal allocation of factors and improve the quality and quantity of economic growth. The demand-side reform mainly includes the troika of investment, consumption, and export, while the supply-side includes factors such as labor force, land, capital, institutional creation, and innovation.

2. Demand side management

The demand side mainly includes monetary policy, fiscal policy and foreign exchange policy. Monetary policy mainly affects the money supply and interest rate levels by adjusting interest rates, deposit reserve ratios, etc., in order to achieve economic goals such as promoting economic development and adjusting prices.

Fiscal policy expands or shrinks the economic aggregate and regulatory structure by increasing or reducing government fiscal expenditures and tax collection; foreign exchange policy maintains the country’s economy through exchange rate adjustment, foreign exchange reserve management and other means. Economic and financial security.

3. The supply side and the demand side complement each other

In fact, the supply side and the demand side are complementary to each other and complement each other. Only relying on a single monetary policy or fiscal policy control may bring about inflation or deflation problems. The supply-side reform focuses on improving productivity, technical level, quality, etc., thereby stimulating economic aggregate growth and improving efficiency, and providing better support for the demand side.

Therefore, in macroeconomic regulation and control, it is necessary to comprehensively use both supply-side and demand-side means to achieve the goals of stabilizing economic operations and promoting sustainable development.