Research On The Impact Of Total Factor Productivity On China’s Output Gap

From the perspective of the short-term development of the national economy,accurately determining the trends of potential output and output gaps will help to formulate more targeted macroeconomic policies to regulate the economy;from the perspective of the long-term development of the national economy,To develop effective economic development plans and policy measures,a country needs to be based on the correct judgment of potential economic growth trends.As scholars realize that the increase in capital,labor and other factors has not been enough to explain the growth of the economy,the evaluation of the rate of technological progress-the role of total factor productivity in economic growth has been increasingly valued by the academic community.At this stage,there are many ways to calculate the total factor productivity and output gaps,However,it is unquestionable to choose the appropriate measurement method according to the actual economic situation of the country or region.Since 1978,China’s economy has continued to grow rapidly.After years of rapid development,China’s accession to the WTO,population and other dividends contracted,traditional competitive advantages weakened,technology,institutional and other factors have not yet played a sufficient supporting role,resource and environmental constraints strengthened,entered the new economic normal stage.In this context,the measurement of China’s total factor productivity and output gap in the 40 years of reform and opening up is of great significance to avoid China’s entry into the "middle income trap" and maintain stable and sustainable economic growth.Based on this,this paper intends to adopt the following research:(1)Cobb-Douglas production function and transcendental production function to measure the total factor productivity of China since the reform and opening up.(2)Using the traditional production function method and single variable HP filter method to estimate the potential output and output gap in China.(3)Based on the previous studies and the actual economic situation in China,we select the total factor productivity(TFP)calculated by Cobb-Douglas production function and the output gap calculated by HP filter method,and construct a vector autoregressive model to analyze the impact of TFP on the output gap.The research results show that:(1)since the reform and opening up,China’s total factor productivity growth rate has been positive and negative,and the growth rate of total factor productivity is still low.There is still much room for improvement in the contribution of technological progress to China’s economic growth.China’s economic growth is mainly or relying on the growth of capital investment and labor input,it is based on the extensive growth of factor input.(2)China’s output gap also presents classical cyclical fluctuations,and its fluctuations are closely related to key events that have a major impact on China’s economy.For example,the establishment of a market economic system through reform and opening up,the Asian financial crisis,the accession to the WTO and the integration of the world economy,The world financial crisis and so on.(3)The Granger causality test shows that the total factor productivity and the output gap have a one-way causal relationship.The VAR model results show that the first-order lag of the output gap and the first-order lag of the total factor productivity and the second-order lag of the output gap There are different degrees of significance.At present,China’s economic development faces speed shifting nodes,structural adjustment nodes,and power conversion nodes.To achieve the goal of maintaining stable annual economic growth during the 13 th Five-Year Plan period,it is urgent to take three dimensions: institutional reform,structural optimization,and factor upgrading.In force,the government should implement active policy measures to improve the total factor productivity through supply-side structural reforms,thereby increasing the utilization efficiency of production factors and its contribution to economic growth,and achieving better and faster growth of China’s economy.The corresponding measures mainly include:(1)comprehensively deepening reforms to improve production factor efficiency and resource allocation efficiency;(2)transforming production methods,optimizing urban and rural structures and industrial structures;and(3)actively implementing innovation-driven development strategies to improve production factors’ quality and grade.