Abstract:In order to analyze the optimal equilibrium strategy of policy coordination under the established macroeconomic goals, the endogenous government expenditure policies are introduced in the model, and a nonlinear structural model through the nonlinear interest rate and money supply equations is built. Further, the nonlinear structural model is log-linearized and parameter calibrated to analyze the coordination of monetary policy and fiscal policy with a given expected goal. In particular, a policy equilibrium simulation analysis is carried out in 2008 and 2017. The simulation analysis find that when the economy fluctuates greatly, the model can obtain the optimal policy combination of real interest rate and fiscal deficit rate that satisfies the equilibrium situation, which is more consistent with the policy combination adopted by China's current real economy.