During the 1980s, the U.S President Ronald Reagan issued and implemented a new economic policy to fight against the inflation. This policy contains four main actions what are to reduce the growth of government spending, reduce the federal income tax and capital gains tax, reduce government regulation, and tighten the money supply. The problem of inflation United States people faced decades ago is what the Chinese are facing right now.
The new Chinese prime minister Li ke qiang issued his Likonomics what are similar with the Reaganomics to reduce the high inflation in China today, and also to clean the environment. As known, China has the largest economic growth in the world, however, people do not know China also has the largest environment pollution in the developing countries. People may say China's economic boom is under the environment destruction. For example, it cost 970 billion Yuan to clean the environment and recover the ecosystem in 2009, which cost 3.8% GDP. Besides that, the environmental degradation cost increasing rate has exceeded the increasing rate of Chinese GDP, which is 9.2% environmental degradation cost increasing rate compares to the 8.7% GDP increasing rate.
Bottom Line: Reaganomics and Likonomics are both used to fight against the inflation crisis, however , different times and different areas endowed Liknomics with new tasks and responsibilities what are slowing the economic growth and concerning more about the environment issues
* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.