| As an important part of social total investment, public investment plays a critical role on economic development and living raises, and increasing public investment has become a powerful means of stimulating its economy. At planned economy period, our government is an omnipotent government which acted as a producer and controller; at market economy period, the responsibility of our government is to supply the public with public products and services. At the present stage, there are lots of scholars studying on the economic effect of public investment based on production function or cost function, with the development of econometrics, many of them prefer to use VAR model to analyze the relationship between GDP and public investment. This article is also being on account of VAR model to carry out empirical study from both aspects of total and industry-classified public investment.Seven parts are included in my paper:(1) Chapter one is an introduction which includes raise of problem, an overview of overseas and domestic research status, study contents and method adopted in my thesis. (2) Chapter two gives a clear definition of public investment and introduces relevant theories related to public investment and economic growth. (3) Chapter 3 analyzes the changes of GDP, non-public investment, public investment and industry-classified public investment descriptively at a macro level, and finds that public investment has a significant impact on economy after two financial crises. (4) Chapter 4 mainly discusses the relationship between public investment scale and economic growth. By cointegration test and OLS equation we find that non-public investment plays a larger role than public investment in long run, but public investment still has a strong impact on economic growth especially with two years lags. (5) Chapter 5 mainly explores the relationship between industry-classified public investment and economic growth. By establishing a VAR model, on a premise of one year lag, the effect of science and education investment on economy is most significant and it will last ten years until it disappears. The second one is infrastructure investment with six years’ lasting. As to public service investment, it has a negative impact on economy in first five years, then changes to positive impact. (6) Chapter 6 focuses on making suggestions specifically, for example, optimize public investment scale and structure, bring private investment into public domain and set up a sound public investment management system, etc. |
