Study On The Impact Of Local Government Debt On Regional Economic Growth In China

This paper studies the impact of local government debt on regional economic growth.After the subprime mortgage crisis in 2008,countries have frequent debt crisis.In order to boost the economy to take a "four trillion" of economic stimulus,China also have been high local government debt situation.Although the management of local government debt gradually standardized after the implementation of new Budget Law,but the academic community for local government debt on the actual situation is still insufficient to study.Based on the audit announcement issued by the government auditors in 2014,and a new reliable source of local government debt data from the local government bond issuance disclosure documents since 2014,this paper compiled the debt data of China for the five years of 2010 and 2011-2015.According to the analysis of local government debt,it is found that the local government mainly borrows through the financing platform company and the government department,the main source of which is the bank loan,the debt investment concentrates on the infrastructure construction,the repayment of which is concentrated in nearly three years,the western region of the province’s debt ratio is generally higher and so on.This paper analyzes the local government debt through the short-term IS-LM model to promote economic growth,but in the long-term Barrow model found that local government debt and regional economic growth was inverted U-type relationship,and put forward the "Local government debt contribute to regional economic growth " and " China’s local government debt and regional economic growth there are inverted U-type relationship " two propositions.In the empirical analysis,the measurement equation is constructed and the local government debt has no significant effect on the regional economic growth.The threshold of the local government debt is constructed and the threshold of the local government debt is 25%.It is found that the local government debt and the regional economic growth are inverted U-type relationship.Finally,the author puts forward some policy suggestions on how to establish and perfect the local government debt supervision mechanism,strengthen the financial support and policy guidance to the central and western regions,and encourage the social capital to enter the public domain.