Study On Relation Between Factor Productivity And Economic Growth In China Based On Time-Varying Parameter

In the economic area, the economic growth issue has always been the hot issue. Capital and labor invest factor are the most important factors among the factor which affect economic growth. In China, the process of growth mode changes from"extensive growth"to"intensive growth". It has more practical significance that study on capital and labor productivity, as well as the tatal factor productivity which is composed of capital and labor productivity weighted , and analysis the root of China economic growth..This paper starts from the relationship analysis between the single factor productivity as Capital and labor and economic growth. If we adopt traditional method to study on the mutual influence between the variations, we could only acquire the average influence relations in the variation sample, and we can not get the variation changes year to year. So the article adopt a new method, Kalman filtering algorithm.,to research the Time-varying Parameter relationship between capital and labor's single Factor Productivity with the economic growth by establish the states space model. By the time-varying parameters cointegration test, the estimate result reliability is proven. simultaneously to the time-varying parameters estimated the result has carried on the analysis,and then the time-varying parameter estimation results are analyzed.The paper estimates the traditional aggregate production function by application of Least Square method with dmmy variable and Ridge Regression, and points out its deficiencies. According to these deficiencies, the paper established time-varying aggregate production function model,and esitimated time-varying aggregate production function in china by adopting two time-varying parameters methods: Kalman filtering algorithm and Multilayer Hierarchical Method. At the same time, the total factor productivity growth rate is estimated in the two kinds of system of aggregate production function.The discussion of initial value of Multilayer Hierarchical Method to estimate aggregate production function was carried out.The residual of two time-varying parameters methods estimating aggregate production function was compared.The paper estimated the growth rate of the total factor productivity by adopting the traditional method and the two time-varying parameters methods in the framework of Solow Growth Accounting Equation.,and pointed out the deficiencies of the traditional method.The diffrence of assumption and economic sense between time-varying parameters method and traditional method was perceived. The discussion of initial value of Multilayer Hierarchical Method to estimate Solow Growth Accounting Equation.was carried out. The residual of two time-varying parameters methods estimating Solow Growth Accounting Equation was compared.Compared the total factor productivity growth results in china from 1952 to 2005, the paper found that the result and general trend of the six methods are similar,and the result of traditional methods fluctuates over a large area but time-varying methods to be smaller,and explanations have been given. From the six results of TFP, estimation by the Multilayer Hierarchical Method is taken as fundamental data of the macroeconomic economic analysis in china.By these dates,the paper analyses the relationship between the input factor and economic growth,and the contribution of TFP to economic growth.The paper carried on the comparison of TFP by parametric and nonparametric methods,which indicated that TFP is composed of technical progress and technical efficiency.Then the prime cause of TFP growth is analyzed by calculation of the contribution made by the technology progresses and technical efficiency to TFP.