Empirical Analysis On Infrastructure And Economic Growth In Central China

Since reform and opening-up, the central regions economic achieve a rapid growth, the annual growth of GDP reached 15.41% during 1978-2008, and infrastructure plays an important role in the process of rapid economic growth. The field about the relationship of infrastructure and economic growth has also been concern. Research of central area infrastructure investment and construction for economic growth, which is beneficial to the relevant department formulate the infrastructure development policy, so as to promote economic growth, realize the target of the rise of the central region.This paper through the establishment of three elements of production function model to estimate output elasticity of the central region infrastructure investments, found that the output elasticity of infrastructure investment is 0.3710%. Using Johansen co-integration test methods test infrastructure construction and economic growth with VAR model, found that the correlation of most of the infrastructure indexes and economic growth is positive. Based on the Vector error correction model, in Granger causality test, we find that infrastructure is the reason of economic growth in long-term. On the other side, the reason of economic growth promoted infrastructure development is not clear, therefore, infrastructure construction promotes economic growth predominates in correlations of them.