The Macroeconomic Policies of China and the United States in Dealing with Economic Shock Based on the IS-LM Model Taking the Financial Crisis in 2008 and the COVID-19 in 2020 as Examples

The financial crisis in 2008 and the COVID-19 in 2020 have had a serious impact on the world economy. Macroeconomic policies are an effective regulatory approach for each country's government to respond to economic shocks. China and the United States, as the two major representatives of socialist and capitalist countries in the world, have distinct representativeness in their macroeconomic policies. The IS-LM model, is an important method for analyzing short-term economics, it can significantly demonstrate the effectiveness of a country's macroeconomic policies, and is an important component of Keynesian theory. By studying the changes in IS curve and LM curve caused by the macroeconomic policies of China and the United States during the financial crisis and the COVID-19 epidemic, it is concluded when dealing with potential economic shocks in the future, the government should implement strong macroeconomic policies, actively regulate supply and demand, and implement macroeconomic policies that are suitable for the country's social system and open economy.