The Research Of Public Expenditure In Shanghai Promoting Regional Economic Growth

It's of interest to study economic growth, a fundamental aim of economic policy, especially for such a developing country. China has been in the transition from planning economy to market economy in order to accelerate its economic growth. Finance expenditure for the public economic activity has important influence to the whole national economic growth. The relation of finance expenditure and economic growth lay particular stress on domino effect analysis. How finance expenditure iron even short time economic fluctuation and promote long time economic growth is a forward problem.Shanghai finance policy aim as public finance system in "Eleven Five" period, optimizing structure of finance expenditure and increasing hold out function to "Science and education prosper the city" main stratagem. Few studies the impacts of fiscal policy on economic growth in Shanghai, furthermore quantity is scarce. There are important theory significance and practice function.The dissertation tries deeply and entirely investigated the effects of fiscal policy on economic growth by using theory analysis and math model analysis. As for analytic methodology, this paper is characterized by dominant deductive reasoning, the combination of positive with normative analysis with the former underlined, the mix of qualitative and quantitative analysis with the latter emphasized. The paper consists of nine chapters, each of which comprises conceptual framework, empirical evidence, and conclusion and policy suggestion on the whole.The primary aim of this dissertation mainly embraces: building or introducing relative theoretical frameworks on the effects of fiscal policy on economic growth, such as the traditional income-expenditure model, model for public spending and endogenous growth, for public investment and economic growth, for public R&D capital and economic growth. Demonstration analysis for fiscal policy and economic growth in Shanghai, including estimating the fiscal policy multiplier, optimal government expenditure size, the role of public capital, public R&D capital andhuman capital played in influencing economic growth and their efficiency size, the impacts of fiscal structure on growth, assessing the sustainability of fiscal policy, and constructing Shanghai new management systematic frame of public finance expenditure, which are what the innovation is in this paper.The paper investigates the effect of fiscal policy on economic growth in traditional income-expenditure model. The IS-LM model in mathematical language is introduced, which puts emphasis on the fiscal policy multiplier to the aggregate output. Then a IS-LM model is estimated using Shanghai data which indicate the shape of IS and LM curve is normal and IS-LM model can be applied to Shanghai regional economy. The fiscal policy multipliers, computed with the estimated parameters , are about 1.83 on average for Shanghai in 1985-2005, with which of every year the impact of fiscal policy change on the aggregate demand and its of growth is assessed, some relevant policy is suggested to spur current domestic demand.The paper investigates the impact of public capital on economic growth. Empirical research on the impact of government capital spending on economic growth is reviewed. A simple overlapping generations model is introduced to illustrate the role of public investment, showing the growth rate is concave in public investment as a percentage of GDP. The production function approach is applied to Shanghai to examine the contribution of labor and public investment to economic growth. Relationship between the size of public investment and economic growth, and the optimal size of government apparatus is also estimated. Some suggestion to increase public investment is addressed.The paper measures the contribution of public R&D and human-resource development capital to the overall output. The theoretical and empirical research that has considered the importance of government expenditure on education and research is viewed. The growth effect of public spending on education is examined in a dynamic general equilibrium model. A production function is estimated to explore the impact of public R&D and human-resource development capital to the output. Assuming the growth rate is s concave function of public expenditures on education and research, the efficient size of the government research sector at which the growthefficient size of the government research sector at which the growth effects of public R&D reach a peak. Some proposal is put forward to back public education and research.The paper examines empirically the effects of fiscal structure on economic growth. Based on an analytical framework which links the composition of government expenditure and economic growth, and defines productive government expenditure, the empirical results suggest that the relationship between expenditure for capital construction, an increase in the share of geological prospecting expenses, pensions, social and relief funds, expenditure for government administration have also negative growth effects. Innovation funds and science and technology promotion funds, operating expenses of industrial, transportation and commercial departments, operating expenses for culture, education, science and health care have exercise positive effects on growth. The effects of government revenue and expenditure structure on economic growth are investigated in one model. Some suggestion is addressed.The paper constructs Shanghai new management systematic frame of public finance expenditure, which includes new public finance budget management system, government finance expenditure benefit evaluation system, treasury centralize payment system, government purchase system, and analysis the relationship between these with economic growth.In the finality, the problems requiring further studies are discussed.