| Economic growth or economic development has always been one of the core issues of macroeconomics and has always been paid much attention by government officials, economists and the general public. This paper argues that China is still a developing country, China's economic development is still far from the steady-state level defined by the traditional economic growth theory. Therefore, the core of China's current economic problems is not a long-run growth after the steady-state level, but a economic development towards to the steady-state level. During the economic development or the actual process of economic growth, technological progress is important, but no longer the only driving force. Consumer demand, as the most important part of the aggregate demand can play a key role in promoting economic development. However, the deficiency of consumer demand, especially the low level of household consumption has become the biggest reality and obstacle during China's current economic development. Therefore, the research on China's economic development can be translated into the research on expanding consumer demand. In other words, as long as expanding consumer demand, China's economy will be able to maintain stable and rapid development for a long time. Then, how to expand consumer demand and improve the consumption level? Most scholars believe that the imperfection of the Social Security System and the expansion of income gap are the main two reasons of the low consumption level. This paper argues that these views did not find the root of this problem. In fact, one's consumer spending is determined by his disposable income which is affected by the initial distribution and redistribution of national income. Moreover, improving the Social Security System and narrowing the income gap are only two parts of the redistribution system. So starting from the national income distribution system, this paper constructs a frame ofã€Distribution system - Consumer demand - Economic development〞in order to explain its impact on consumer demand and economic development. Empirical results show that on the one hand, the expansion of consumer demand and economic development exist a high positive correlation; On the other hand, the improvement of the initial distribution system represented by the degree of non-nationalization and the lift-up of the level of redistribution have a positive effect on the consumer demand. In addition, the distribution system will be introduced to both the aggregate demand and supply equation to set up a Economic Development Model including itself. At the end, this article provides several policy recommendations for increasing consumption and promoting economic development, such as improving the initial distribution system of national income, strengthening the government's income redistribution function, allocating the redistribution funds properly and so on. |
