The Analysis On Mechanism Of Division Of Labor To Promote Economic Growth

The form of economic growth in our country should be changed immediately, and that is to say we should change the mind that quantity is better than quality. Quality of growth should be put to the center. Theories of labor division provide us with new choices. This paper is based on the thinking of Smith, Young and Yang and uses the game theory, externalities and regression method. This paper focuses on the mechanism of economic growth and concludes that it is the division of labor to stimulate the economic growth. The paper first gives a review on history of division of labor, and from classic economics to new classic economics, the theory of division of labor went through about 200 years, during this period also brought forth many classic ideas. This paper makes the point that the division of labor reveals the inner mechanism of social development, and that is, during the course of production the individual of labor made the decision of specialization, which is good to him but the whole society, and in return, with the development of society the division of labor went further. As to China, the development of society needs to perfect the institution. The division of labor has the ability of breaking shackles and establishes the new institution which is good to development. Though an example of Taizhou you can find how the externalities of division of labor to promote the reformation of our nation, and get the answer why the division of labor is the most important factor of reflecting economic growth. Division of labor plays an important role, but the level of it is still low in our country especially between the different areas. The paper made the investigation and found it was the "non-market" competition behavior between governments of different areas which block the mechanism of division of labor.