| Abstract | Government is one of the important participators in the economy, whose behaviors have to be constrained by some rules, otherwise there will be no unique equilibrium of economy or the effect of one policy counteracts with the effect of another. This paper adopts DSGE approach to study the interaction of government buying rule, financing rule and automatic stabilizing rule. It is found that: firstly, when the distortionary tax rate is adjusted according to previous period’s debt, the space of tax elasticity which ensures the existence of unique equilibrium is maximum; secondly, automatic stabilizing rule enlarges the space of tax elasticity; thirdly, among the various compositions of policy rules, the composition of pegging tax rate and weak automatic stabilizing rule is best for stimulus goal of government buying, the composition of pegging tax rate and strong automatic stabilizing rule is best for stabilizing output, and the composition of pegging government debt and weak automatic stabilizing rule is best for stabilizing employment and price level. |