Fiscal Expenditure Policy And Economic Growth Empirical Analysis

Powerful fiscal policy is the main motivation of bounce of China's economic recovery from the financial crisis. However, with the lasting of the promulgation, the effect of expansionary fiscal policy had become weaker, and at the same time, the consumption of raw material and power resources started to increase with the growing price. It is reconsidered seriously about the following questions. Are the implementation of fiscal policy and the aim of public finance to simply chase the growing GDP, or to make the development of economy more reasonable and people's life happier? How can fiscal policy be more effective? They are all researchable issues for academia, as well as the key elements related with the development of the fiscal expenditure policy. Through practical analysis, this dissertation, based on the summary of the achievement of domestic and international fiscal expenditure and economic growth, makes the suggestions of the optimization of the fiscal expenditure structure to keep China's economy growing continuously.This dissertation is divided into four parts.In the first part, it summarizes the theories of fiscal expenditure and economic growth. It is discussed several typical opinion of western and Chinese scholars about fiscal expenditure and economic growth. Representative western opinions includes:the theories of effectiveness and ineffectiveness of fiscal expenditure policy; the theory of deficit financing effectiveness; the theory of the optimization of the fiscal expenditure structure. Chinese typical opinions includes:the theories of effectiveness and ineffectiveness of the total volume of fiscal expenditure; the theories of effectiveness and ineffectiveness of the detailed project of fiscal expenditure; the theory of the diversity of fiscal expenditure in different area; the theory of the optimization of the fiscal expenditure. The common points of them are that they all do research on the effect of fiscal expenditure on economic growth from the respects of the total volume and detailed project of the fiscal expenditure. The different points are that the west pays more attention at theoretical research while Chinese practical analysis which is related to the status of national or provincial or civic economic growth, is deeper and more meaningful, with the given policy suggestions. This part is theoretical preparation and introduction of the following text.In the second part, it illustrates China's fiscal expenditure policy. It analyses China's current fiscal expenditure system and state revenues and expenditures, and describes the effect of different fiscal expenditure subjects on economic growth. The expenditure on infrastructure construction is the most direct way of fiscal expenditure, which obviously promotes the regional economic growth. However, it could be lack of power in the future and lead to overproduction. Education, medical and security expenditure could affect the accumulation of human resource, which may not sharply influence the economy but benefit the continuous economic growth. Technology expenditure is the main promotional power of the economic boom. The state technology expenditure has the character of overflow, which effectively promotes the development of social technology. Public administrative expenditure is the cost of the government when it burdens the managerial responsibility. With the economic development, public administrative cost becomes increasingly high, which could be considered as the effect of the higher requirement to the government duty or the cost of government's promotion of economic growth. Undeniably, the excess public administrative expenditure will definitely threaten the health of economic growth.In the third part, it practically analyses China's fiscal expenditure and economic growth. It organizes and calculates the orientation of the historical fiscal funds, and then models VEC to explain the economic overheat or overcooling in different area, applying the new category of fiscal expenditure. As the model demonstrated, the current fiscal expenditure structure has the unreasonable situation:although infrastructure construction contributes greatly to GDP, it also costs the most. Offering enough funds and policy support to corporations is significant for continuous and steady economic growth; investment into technology and education should not be shortsighted, because in short term, it may not affect obviously the economic growth, but from the view of long period, it plays a basic part; the imperfection of China's social security system will become the bottleneck of economy and the excess administrative system and cost will stop the economic growth. Proper adjustment the over or lack expenditure of different projects is required to support the power of China's economic development.In part four, it raises the financial expenditure policy suggestions for China. Through the empirical analysis of the fiscal expenditure project, which contributes to the economic growth, several aspects of works must be completed for China's future in financial expenditure:optimizing infrastructure construction project; improving expenditure on science, education, culture and health to increasing social security; increasing the funding for the enterprise to promote the marketilization reformation.