Well, Lu Mingzhi was obviously very happy when he said that he would increase his salary, and he could buy more things with more money in his pocket, even a clean official like Lu Mingzhi was of course very happy, but the country was printing money at full speed, and Liu Lang had a big head when he heard this.

"Isn't printing money more inflationary?"

Liu Lang felt that his head was a little big.

"Grandpa Lu, what is inflation?"

Liu Lang asked.

"That is, prices are growing too fast, and people's incomes can't keep up with price growth!"

Lu Mingzhi also knows nothing about this inflation.

"Well, the appearance is so, in fact, the basic reason for inflation is that demand exceeds supply, and people want to get more things, but there are no such things in the market, so these items on the market are strange goods, and of course the price will increase. ”

"Well, Liu Lang, I understand as soon as you say this, that's right, the country's economy is indeed getting better and better after the reform and opening up, but there has not been much improvement in the manufacturing of products, and the key is that the country's production capacity is not enough!"

Lu Mingzhi nodded.

"Yes! You must know that the country now has very few plastic products, grain cultivation is obviously insufficient, pork and chicken are also in short supply, in short, there are many problems, the root of which lies in our productivity is not successful, and a lot of grain planting is even in the stage of agricultural society! Of course, these problems cannot be solved in a short period of time, and now there is serious inflation in the country, and although we cannot solve it fundamentally, there are still some problems that can be done!"

"Oh, Liu Lang, how to solve it?"

Lu Mingzhi knows that the country now attaches great importance to the currency problem, Premier Zhao Hongyang directly led the establishment of a solution group, the heads of all ministries and commissions are members, large-scale printing of money is only a measure, other measures are also in progress, when the solution group was established, there are many people who still want to pull Liu Lang in, in their opinion, Liu Lang is the "first supernumerary think tank" The most powerful skills are not machinery and computers, but economic skills, but Liu Lang has been running around these days, and he has also gone to the suburbs of Shanghai to say that he will not come back, so everyone is not embarrassed to harass him, and now Lu Mingzhi is the first to see Liu Lang, and he immediately asks the other party's opinion.

"Since inflation is that demand is greater than supply, the first thing is to control demand, generally speaking, there are several ways, one is to implement contractionary policies.

The main measures are to reduce the state's capital construction and investment expenditure, restrict investment in public undertakings, reduce the expenditure of various government departments, and reduce social welfare expenditure. The increase in tax revenue is mainly to increase the tax revenue of enterprises and individuals, and after the tax increase, the income of enterprises and individuals will decrease, thereby reducing the level of investment and consumption. ”

Lu Mingzhi frowned when he heard this.

"If that's the case, aren't the common people happy in vain?"

Liu Lang is indeed reasonable, but now that the country is growing rapidly, if the income is reduced, the people will definitely be unhappy.

"This is one way, and the second way is contractionary monetary policy, the direct cause of inflation is the excess money supply, so to reduce the inflation rate, the central bank can do this by reducing the money supply in circulation. This includes the sale of government bonds through open market operations to repatriate money and reduce the stock in the economy, and the increase in interest rates to reduce consumer demand by allowing people to save more money."

Liu Lang continued.

"What? Reducing the currency? Aren't we just the other way around?"

Lu Mingzhi jumped up directly.

"It's not just the other way around, in fact, if you do this, then the rise in bank interest rates will increase the cost of investment, for example, the bank interest rate has reached 20 percent, you must know that the rate of return on doing business can reach 20 percent, and now the bank can make you lie down and make such a big profit, who will invest in enterprises? So this also has a restraining effect on investment. ”

Liu Lang continued.

"Yes, if that were the case, I'm afraid that many of the owners of private companies would not be in business!"

Lu Mingzhi also figured it out.

"So what do we do?"

Lu Mingzhi is a little anxious now, how can he raise the wages of the common people and promote even faster inflation? Isn't this even worse?

"Don't worry, there is a third solution, that is, to increase the supply by policy means, the reason for inflation is that the total demand of the society is greater than the total supply, and increasing the total supply is the key, even if our productivity is not enough, but if everyone has the enthusiasm to produce, let them produce more and work more, then it will be able to greatly alleviate the defects brought by the productivity, the main thing is that the state will increase the willingness of workers to work and labor productivity in the way of tax cuts, and then increase the investment desire of enterprises, thereby driving the increase of total supply; At the same time, enterprises are encouraged to adopt new technologies, update equipment and adjust the industrial structure. ”

Liu Lang proposed a third measure.

"That's a good idea!"

After listening to Liu Lang's explanation, Lu Mingzhi suddenly realized.

"Liu Lang, your title of "supernumerary No. 1 think tank" is really well deserved, many people put forward plans when I participated in the above meeting, but compared with you, their plans are really ......... It's really not as good as you!"

Of course, they can't compare to Liu Lang, who did a very detailed study of the inflation in the 80s, and many experts later wrote articles to discuss the far-reaching currency and analyze how to avoid it from happening in an afterthought.

It is not surprising that the root cause of the inflation in the 80s was the lack of commodities and the mistakes of some state policies, and it is not surprising that China has been in a stable market environment for so many years. So when inflation came, the top leaders were a little at a loss, and as inflation continued to intensify, it was even more chaotic, resulting in huge losses to the country, especially for those middle and low-income people, who were the biggest victims of this currency.

But then again, everyone used to be poor, and many families couldn't afford to wear pants, often a pair of pants was worn by the elder brother or sister, and then the second brother and third sister then wore it, and this pants could become an "heirloom".

It stands to reason that the lives of ordinary people in this era are even poorer than when inflation comes, but why don't ordinary people in this era have many complaints?

The fundamental reason is the imbalance in the hearts of the people, they see that many people have gained huge wealth without hard work, and they have lost their wealth by working hard, when this kind of thing happens, let alone ordinary people, even Liu Lang will scold his mother.

Therefore, in order to solve the biggest inflation since the founding of the People's Republic of China, in addition to the correct policies and guidelines of the state, it is also necessary to make the people feel fair and make them feel that they are valuable.