A Study On The Impact Of Public Finance On Residents' Consumption Demand

Consumer demand is indispensable to boost a country’s economic growthmomentum. For a long time, the important backbone of China’s economic growth is"the investment" and "the export". When the "the investment" and "the export"cooling, we need to find new economic breakthrough and look to the consumer.Consumption leads to the development of economy that can bring economic lastingpower, which can solve the current problems in the economy. To drive theconsumer demand, one of the most important is the residents’ consumer demand. Weare a big country with a population of1.3billion, but the consumption demand ofresidents’ contribution to the economic strength is very weak.In order to release the residents’ consumption of energy and make our economyinto a faster growth track, we study the issue of public finance impact on consumerdemand, and explore the internal relation of public finance and consumer demand,which provide important basis for the government to drive the consumer demand andpromote economic sustainable development. To explore the expenditure of publicfinance’s impact on consumer demand we should set out from the urban and ruralresidents, and should not only analyze the total relationship, but also study thestructure.This article selects time series data from1978to1978for empirical research.We get the following conclusion: for urban residents, public finance and consumerdemand presented "alternative relation", the government’s spending can stimulateconsumer demand from Culture and Education, Technology and Health, Insuranceand Other Spending. For rural residents, the current public finance and consumerdemand presented "alternative relation", but the lag issue of public finance andconsumer demand appear "complementary relation", the government’s spending canstimulate consumer demand from Capital Construction, Support Agriculture, Cultureand Education, Technology and Health and Insurance.