In this paper, we established a small China's macroeconomic model, which is directed by Keynesian theories and some of the theories of new classical macroeconomics are absorbed in. On the other hand, both of the two sides, supply and demand are combined .This model consists of goods market, labor market and money market .The frame of the model is IS-LM theory and price is endogenous by expectations-augmented Phillips Curve .By this meaning, this model can be used not only to forecast for short term but also to analyze for medial and long term and can be called “Keynesian model with price adjusting”.

Download