Research On Government Debt And Spatial Agglomeration Of Economic Activities

In recent years,government debt has played a pivotal role in regional economic development,but it is also an important factor that plagues the sustainability of economic development and regional agglomeration.On the one hand,government debt can provide financial support for infrastructure construction,attract regional production factors to flow,promote regional economic and social development and spatial agglomeration;on the other hand,it can also squeeze out private investment and promote the outflow of production factors to suppress the economy gathering of event space.This article focuses on the impact of government debt on the agglomeration of economic activities,explores the economic principles,and conducts empirical tests to scientifically use local government debt to promote the agglomeration of economic activities.In order to obtain a scientific judgment of the spatial agglomeration relationship between government debt and economic activity,This paper uses Krugman’s core-periphery model for reference.By introducing government departments and forward-looking individuals,the assumption of a balanced government budget is deleted.First,when the cost of trade is zero,At the same time,the economic principles of debt and immigration are briefly introduced.Secondly,when the cost of trade is not zero,there are agglomeration and decentralization forces.The effects of temporary debt divergence and debt convergence policy on the spatial agglomeration of economic activity are analyzed,respectively.It can be concluded that temporary debt divergence and debt convergence will cause temporary spatial fluctuations or permanent spatial agglomerations.As for whether the fluctuations or agglomerations depend on whether the debt ratio divergence is lower or higher than the "breakpoint debt divergence" and "Point debt convergence" level;temporary debt divergence temporarily weakens a country’s ability to participate in tax competition,and in the long run,debt integration enables debt reduction countries to compete in tax Become a stronger player.Based on a theoretical analysis of the spatial agglomeration relationship between government debt and economic activity,construct an econometric model,using panel data from 25 provinces in 2008-2018,and perform a regression analysis.It is concluded that the local government debt and economic activity agglomeration have an invertedU-shaped curve;The eastern region has the most tolerance for debt,and the curve’s turning point is also the largest.This gives some policy implications: a dialectical perspective on the role of government debt in agglomeration of economic activity,reasonable control of debt volume,and actively exerting the effect of local government debt on agglomeration of economic activity space;According to local conditions,policies related to taxation or debt should be introduced to promote regional agglomeration.