英语论文网

he economic boom period and automatically reduce the depression during economic recession without any action by the government. In boom phase, the unemployment rate falls, the number of unemployed people decreases, unemployment benefits and other benefits will automatically fall, thereby inhibiting the disposable income and consumer demand growth; on the contrary, in economic recession, the unemployment rate rises, number of unemployed people increases, unemployment benefits and other benefits will automatically rise, thereby offsetting the decline in disposable income and consumer demand. However, it must be pointed out that automatic stabilization has a certain effect on balancing supply and demand, stabilizing prices and maintaining the smooth operation of national economy, but its effect is limited. It can only moderate the extent of the recession or inflation, and it can not change their overall trend. Only relying on automatic adjustment can not guarantee sustained and balanced economic growth, there must be moderate government intervention to ensure that national economy can run healthily (Funashima, 2015).
New Zealand government tightened fiscal policy and monetary policy, such as improve OCR of four times in 2014 due to overheating, the influx of new immigrants, overheating in real estate and other industries, the government's fear of causing new real estate bubbles and inflation, which inhibited the development of the real estate industry. Considering from multiplier effect, to reduce investment spending on an industry will affect the income and development of other industries, so the cycle continues, it will lead to declined investment and consumption in many related industries, Thereby reducing the risk of economic overheating and inflation. Judging from the results, New Zealand's real estate prices fell sharply in 2014, there was decline in the volume, New Zealand's overall economic performance was stable, there was no phenomenon of overheating and inflation rate of inflation in the New Zealand economy, indicating that in 2014, the government’s tightening monetary policy was successful (Bhattarai, 2016).
In 2015, due to the economic downturn, the New Zealand government implemented a proactive fiscal policy and loose monetary policy, as well as increased government investment. Considering from multiplier effect, investment expenditure of a department or an enterprise will be converted to income of other sectors, the income obtained by other sectors will be used for consumption or investment after deducting savings, which will be converted into revenue of another sector. This cycle will lead to multiple increase of investment or spending in national income. New Zealand's GDP per capita in 2015 was $ 37,773, there was an increase of $ 7,000 from $ 304,000 in 2014, indicating that the New Zealand government's proactive fiscal policy and loose monetary policy in 2015, as well as the increased government investment were successful (Bhattarai, 2016).

2.8 Crowding-out effect
Crowding-out effect means that a government implements the expansionary fiscal policy (mainly government investment) by borrowing from the public (enterprises, residents) and commercial banks, causing interest rate rises, competition in demand for loan