The 1st session of Unirule Western Classics Reading Club 2016 was held in a new form at Unirule Beijing Office on Mar. 12th. The topic was “Supply Side, Demand Side, and the Policy Making of Austrian School of Economics.” Present at the session were Mr. MAO Yushi, Honorary President of Unirule; Professor ZHANG Shuguang, Chairman of Unirule Academic Committee; Professor CAO Yuanzheng, Chief Economist of People’s Bank of China; and Professor FENG Xingyuan, Deputy Director of Unirule.

Mr. MAO Yushi illustrated the ratio of total savings and final consumptions of countries including China, India, Japan, US, and UK in 2014. He pointed out that China’s had the biggest ratio of savings, 50% of total. And other countries accounted 30%, 20%, and 10%. It was a prominent characteristics of China’s economy. Mr. MAO Yushi then explained the reason, that is the public ownership that led to high savings, high investment, and low consumption. The government has limited influence on the demand side, but for the supply side, there is a lot the government is able to do.

Professor ZHANG introduced that the most important aspect of the supply school was the issue of tax. By lowering the tax rate and stimulating the economy, growth was expected. What differentiated the supply school of economics from the Keynesians was that Keynesians’ emphasis on stimulating the demand instead of the supply.

Professor CAO Yuanzheng thought all the countries in the world wanted to create a new institution, and a new environment to let the new technology stand out. However, from the perspective of economics, technological advances are random and hard to predict. However, the supply side reforms encourage the cultivation of a new environment where new technologies can emerge in order to raise productivity. He also mentioned the three features of the New Normal: the low growth rate globally, the low inflation in the world economy, and the low interest rate.

In the afternoon session, the participants and the mentors of the class discussed various issues concerning the economic theories, the competition order, and the government’s limits.