Title: Bank Credit Creation, Macroeconomic Accounting Analysis, and the Equivalence of Fiscal and Monetary Policies

Speaker: Li Boyao, Doctor of Economics, Associate Professor and Master's Supervisor of the Business School, China University of Political Science and Law; Editor-in-Chief of Journal of Political Economy. His main research fields are monetary and banking, macro policy analysis, and political economy. He has published more than 20 papers in journals such as Metroeconomica, International Review of Financial Analysis, Economic Modelling, Shanghai Journal of Economics, and Quarterly Journal of Political Economy, and presides over a number of national and provincial-level scientific research projects including the National Social Science Fund.

Abstract: This study proposes the concept of "the equivalence of fiscal and monetary policies at the macroeconomic accounting level"—that is, the two types of policies have the same impact on bank balance sheets. Based on the theory of bank credit creation, it constructs a macroeconomic accounting model, forms an accounting description framework for macro policies, and reveals the transmission channel of policies through bank balance sheets.

The study analyzes various macro policies such as public fiscal expenditure, government capital injection into banks, and open market operations. According to the way they change bank balance sheets, fiscal and monetary policies are divided into two categories, and each category has consistent effects on bank balance sheets and credit supply. The conclusions include:

Both types of policies have a multiplier effect on credit supply, and the size of the multiplier is determined by the policy type, bank supervision method, and bank balance sheet structure/liquidity status;

Both types of policies also have a multiplier effect on output, clarifying the role of banks in the transmission of fiscal and monetary policies, and revealing the fiscal effect of monetary policy and the monetary effect of fiscal policy.

Date & time: 26 November 2025, 16:00 - 17:30

Venue: B438, Zhixin Building, Central Campus, Shandong University