Research On The Contribution Of Economic Infrastructure To Economic Growth

The relation between infrastructure investment and economic growth has always been an eye-catching issue. Taking the issues reflected in the implementation of the infrastructure investment policy as the background, this paper attaches great importance to the research in the effect of infrastructure investment on economic growth with the view of the experience cognition in theory and practical analysis.Both theoretic research and practice experience indicated one country's infrastructure service had very important effect on the stabilized development of economy in the long term, especially for developing country like China where infrastructure had ever been the "bottle neck" for economy development. The paper explains infrastructure is the necessary precondition for promoting economy development with the view of experience cognition and puts forward that the effect of infrastructure investment on economic growth.The World Development Report published by World Bank in 1994 pointed out that infrastructure capital stock had substantial effect on economic growth. This paper makes practical analysis on "The contribution of infrastructure capital stock on economic growth" with the data from 1985 to 2002. The paper establishes a gross productive equation about the contribution of productive elements on economic growth based on C-D productive function and estimates the productive elasticity of every productive element; infrastructure capital stock is the more positive reason for promoting economic growth than the other by Granger cause and effect test; this paper analyses the contribution of infrastructure invested by national debts on economic growth in the same years with the productive elasticity and marginal product; the paper calculates the average contributions of the infrastructure, average capital, labor and technology advancement on economic growth from 1985 to 2002.China government took most of the 660 billion national debts on the infrastructure construction from 1998 to 2002. The infrastructure would provide service for our economic activities and inhabitant living for decades of years at least. Therefore, the infrastructure investment provided by national debts not only had positive effect for that present time but also would have important effect on stabilized economic growth for a long time. The paper establishes a calculative model with the data of infrastructure capital stock in the end of 2002 and calculates the gross contribution of infrastructure provided by national debts from 1998 to 2002 on the economic growth for the future.Both theoretic and practical analysis indicates that infrastructure capital stock exerts a positive impact on economic growth and it will increase long-term economic growth rate.Based on the theoretic study, this paper makes policy suggestion to the reform of infrastructure system.