Empirical Researches On The Influence Between Public Expenditure And Economic Growth Of Hunan Province

The relationship between public expenditure and economic growth has been an important in macroeconomic research. Since there are defects such as monopoly, public goods, external as well as asymmetric information in the market economy itself, making the government's macro regulation and control inevitable. As an important means of macro-control, government fiscal policy has an important influence in promoting economic stability and development, while public expenditure (also known as financial expenditure or government expenditure) as the main fiscal policy lever, the scale and structure of which are closely related with the region's economic growth. Hunan Province, as one of the main provinces in the "Rise of Central China" strategy, after 30 years of reform and opening up, has been developing sustainably, rapidly and stably, in which the Government's public expenditure played an outstanding contribution. In this paper, we take Hunan Province as an example, and theoretically establish function mechanism models of public expenditure in the region's economic growth mechanism, and by using historical data in Hunan as samples, we made empirical researches respectively from the scale and structure of public expenditure to economic growth. On the one hand, according to the empirical analysis of the relationship between the scale of expenditure and economic growth, Hunan province has a great output flexibility in public expenditure, and public expenditures have a positive impact on economic growth in our province, but the public expenditures have not yet reached the best scale, there is still further rise in space. On the other hand, also through the empirical study of the structure of expenditure and economic growth, we analyzed the impact of the structure of public expenditure classified by function on economic growth of Hunan economy, and its findings show that all other public expenditure in Hunan's has a positive correlation with economic growth except administrative fees. Based on the theoretical and empirical researches, and further consolidated the existing problems from the practice of the scale and structure of public expenditure in Hunan Province, we suggest that the government of Hunan Province should maintain the stable growth of public expenditure in scale, at the same time pay attention to adjust and optimize the structure of public expenditure, particularly strengthen the construction of infrastructure spending, consolidate the foundation of agriculture in Hunan, and increase the efforts to support the scientific and technological progress and the development of education, to improve efficiency in the use of financial resources, optimize the structure of public expenditure system and promote a sound economic development.