An Empirical Study On The Relationship Between The Investment On Fixed Assets And Economy Growth Of China

The economy of China had been depressed for several years after the Asian Financial Crisis in 1997 and the sign of recovery appeared in 2002. The increasing rate of investment on fixed assets began to speed up in 2003. Although "The Non-typical Pneumonia" hurt the economy seriously, the investment on fixed assets of the preceding three quarters increased 30.5% in 2003 and the first quarter of 2004 exceeded 40%. As the investment on fixed assets and economy increased dramatically, a great deal of debates and arguments about the investment on fixed assets and the speed of economy development appeared.By using theoretic and empirical method, this article try to study the importance of investment on fixed assets to economy from the point of the relationship between investment on fixed assets and economy growth.. This article will also discuss whether the investment on fixed assets increase too quickly and the rate of the investment on fixed assets to GDP is reasonable. At last this article will give a reasonable rang of the rate.At first, this article summarize the theory and research that are related to investment and economy growth in the introduction part .In this part, the author introduce the process of the development of investment and economy and theory and research as well as the current research abroad and home. Because there are too many complicated concepts are related to investment and economy growth and they are often confused, the author will define some concepts that may be used in this article at the end of the introduction part. In the first chapter, this article will analyze the function of investment on economy growth by introducing some theories of economy growth and economic cycle. Then this article will analyze the relationship between economy growth and the quantity of investment on fixed assets, the rate of investment on fixed assets to GDP, the rate of increasing of the investment on fixed assets. In the second chapter, the author will mainly introduce the development of the investment on fixed assets and economy growth of China from 1978 to 2005 and empirically analyze the relationship between investment and economy growth. In the third chapter, the author will use the traditional economic measure method and Granger-Engle integration test method and Cochran-Occult method to analyze the relationship between the quantity of the investment on fixed assets and national production, the original and legged effect of the investment on fixed assets, the relationship between the rate of the investment on fixed assets to GDP and economy growth, the increasing...