On The Relationship Between Fiscal Expenditure And Economic Growth

This paper is due to the research on the relationship between the government expenditure and the economic growth. The paper is consisted of four parts, Existence and the functions of government, Relationship between the government's expenditure and the economic growth, Relationship between transfer system and the economic growth, Relationship between economic growth and the ratio of local government and central government. Two main methods are used in the paper, one is the econometric method that to analysis the relationship between the government's expenditure and the economic growth, another is the endogenetic model of economic growth that to resolve the best way of how our society developed. For the relationship between the government's expenditure and the individual consumption is some how the relationship between the collective sense and individual sense, in order to research influence of the government's expenditure on individual utility by analytical means, this paper assumed that the collective sense and individual sense is uniform. The paper takes as more factors as possible into account consider to analysis the relationship between the government's expenditure and the economic growth, such as depreciation of fixed assets, advancement of technology, the forming of fixed assets which origins from the constructive expenditure of government, and so on. On the base of qualitative analysis and quantitative analysis, using the dynamic mathematic techniques, this paper draw four conclusions.1.The research on the relationship between the government's expenditure and the economic growth should be on the basis of individual data from one country but not on the huge flock data from deferent countries.2. The inner budget expenditure of the Chinese government promote her economic growth more remarkably, So the government should strength her inner budget expenditure. On the contrary, the outside budget expenditure can only give little help to economic growth.3 The system of welfare do not only good to the stabilization of our society, but also to accelerbrate the economic growth.4 The expenditure of central government could boost the economic growth more than that of local governmnet, so we should strength the central government's expnditure.