Study, The Size And Structure Of Financial Expenditure And Chinese Economic Growth

Fiscal policies as effective measures to control the macro economy play an important role in the economic development. The fiscal expenditure is very important in our daily life as the fundamental part of fiscal policies. It support our government to work with money ,at the same time ,reflect the the degree to which the government get involved in economic life and social activities .It is significant to research fiscal expenditure.The two principal aspects of fiscal expenditure are the scale and the structure. Whether the scale of fiscal expenditure is appropriate, influence not only the performance of the government,but also the allocation of social resources. Different expenditure item effect the growth of economy differently and reasonable structure of fiscal expenditure makes economic development assured.In chapter 2,we introduce common concepts of fiscal expenditure. In chapter 3,we make a research on the relationship between the scale of fiscal expenditure and the economic growth, and use the C-D production function to estimate the best scale of China, and the result is 21.2%,which correspond with the prensent scale. In chapter 4,we make a research on the relationship between the structure of fiscal expenditure and the economic growth. In order to find out how does the 10 items of fiscal expenditure we choose influence the economic growth , we set up the multiple linear regression model,and the methods we use to analyse are OLS and time-varying parameter model. The same result of the two methods indicate 7 of the 10 items are negative to the economic growth,and the other 3 are positive to the economic growth. In the last chapter,we give suggestions about how to adjust the structure of fiscal expenditure based on the conclusions.