An Analysis On The Relationship Between Investment And Economic Growth

As a basic factor of influence on economic growth, investment plays an important role inpromoting the sustained, stable and coordinated development of economy. This thesis carriesout both theoretical and empirical analysis on the relationship between investment andeconomic growth in the following three aspects: investment scale, investment structure, andthe contribution of investment to economic growth. First, the analysis on the relationshipbetween investment scale and economic growth reflects that the fluctuation of investment hasa close link with the fluctuation of economic growth, therefore, the moderate investment scaleplays a key role in achieving positive circulation in social reproduction and stable economicgrowth. Secondly, the correlative analysis on the relationship between investment structureand economic growth can clarify that diversified sources of investment, optimization ofinvestment industrial structure and rational regional structure can promote the nationaleconomy to develop in an effective way, therefore, rational investment structure is aprerequisite for advanced economic structure as well as an important guarantee for realizingsustainable economic growth. Finally, to estimate the contribution of investment to economicgrowth indicates that the input of physical capital is the main source to promote the economicgrowth in our country by means of the model of effective labor production function. Sotechnical progress and the improvement of workers' quality are favorable to realizing thetransformation in the pattern of economic growth. On these bases, the rate of China'seconomic growth and the trend of input elements over next decades are forecasted, thefavorable and detrimental factors that affect sustainable economic growth are analyzed, andsome strategies on how to promote sound development of economy in future are suggested.