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Abstract

This paper conducts an empirical analysis of influence of fiscal expenditure supporting agriculture monetary supply on rural residents’s consumption by adopting a vector auto-regression model, based on the data from 1978 to 2011. The study indicated that: in the short term, fiscal policy is the Granger reason of rural residents’ consumption, monetary policy is not the Granger reason of rural residents’ consumption; in the long term, the comprehensive function of fiscal policy and monetary policy has a great influence on the of rural residents’ consumption. Under the background of Economic Transition and Urbanization, Expanding Domestic Demand is the slogan. We should coordinate fiscal policy and monetary policy to promote the rural residents’ consumption.

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