Service Industry And Economic Growth On The Stability Of The Empirical And Theoretical Analysis

There are a lot of theories about the economic cycle for all the time. Researchersconsider the factors affecting the economic cycle and fluctuation mostly from variousangles such as the external shocks and endogenous factors, but seldom from theindustry angle. After World War II, there was a significant ease in the fluctuation ofthe economic cycle, and then a greater ease since the1980s. At the same time, theservice industry began to flourish in the developed countries, accounting for half oftheir national economy. Therefore, a few researchers, such as Burns and Fuchs, beganto try to explain this phenomenon with the rise of the service sector. With thecontinuous improvement of the service economic theory, the characteristics of theservices to calm economic fluctuations were generally recognized. However, the2008financial crisis makes the stability characteristics of the services to be questioned. Theopposite reason is that, it is financial industry–the part of the modern service industrythat has led to fluctuations in the economic cycle, so that the stability characteristic ofthe service sector has disappeared and fluctuations in the economic cycle becameintense. The relationship between services and the economic cycle becamecomplicated and confusing. There are few researches on the relationship betweenservice industry and the economic cycle, and even fewer researches involved the2008financial crisis. Therefore, it is very necessary to do research in this area.At present, in order to optimize the industrial structure, and promote stableeconomic development, Chinese government has introduced a number of policies tosupport the development of service industry, which starts to have initial results. Thechanging relationship between the service industry and the economic cycle is boundto influence future policy. Therefore, this article tries to study multinations’ industryvolatility within30years since1978, to clarify the relationship between services andeconomic cycle at this stage, and provides a reference for Chinese government inmaking industrial policy.The main content of this paper is divided into eight chapters.Chapter1introduces the research background, significance, research frameworkand innovation.Chapter2introduces the relevant literature about the relationship betweenservice industry and the economic cycle at home and abroad since World War II, andsorts out the foreign literature from the extent and the mechanism of influenceappropriately, and summarizes the domestic literature from multiple perspectives ofthe system, industry, industry characteristics, and industry classification and research countries.Chapter3introduces the concept, basic characteristics, classification, relevanttheories and the latest developments of services and the economic cycle.Chapter4uses the HP filter method, ordinary least squares method and othermeasurement methods to research on the output fluctuation in service sector in somedeveloped and developing countries during the past30years, and establishes theregression model to check on the influence of services output to total output.Chapter5uses the HP filter method, ordinary least squares method and othermeasurement methods to research on the employment fluctuation in service sector insome developed and developing countries during the past30years, and establishes theregression model to check on the influence of services employment to totalemployment.Chapter6uses the HP filter method, ordinary least squares, vector autoregressionand other measurement methods to explore, for example, the mechanism of theservice sector to the economic cycle in the United States, from the perspective ofcapital, labor and industry interaction.Chapter7uses the HP filter method, ordinary least squares, vector autoregressionand other measurement methods to study the fluctuation of the output andemployment in China’s service industry since reform and opening up, and sets up aregression model testing service industry to the total economy and total employment.In the same way, examines the mechanism of China’s service industry on theeconomic cycle from the perspective of capital, labor and industry interaction.Chapter8summarizes conclusions and makes policy recommendations andfuture research directions.