Causal Analysis Of The Difficult Transition Of Chinese Economic Growth Method

The method of Chinese economic growth can not become more effective in a long time. So we will analysis the causal of the difficult transition of Chinese economic growth method. We use the Solow Model, Romer Model and Marx's Capital Composition method as the tool of basic theory. This paper estimates the contributions of various production factors in China's industrial production by taking advantage of the fundamental framework and idea of Solow model and instrument variables introduced by Berry[1995] in the empirical analysis of industrial organization to measure sample date. It is found that the estimated parameters before are biased due to the presence of implicit data and that parameter estimation can be better adjusted after the introduction of instrument variables. The re-estimated production function shows that the contribution of capital to Chinese economy is smaller than the usual estimation and the contribution attributable to labor rises. Excessive investment and economic mechanism as the main causal decline the invest effectiveness; and excessive labor is the comparative advantage of China in a long way. In short, the low level of capital accumulation is the basic causal of the difficult transition of Chinese economic growth. We first adopt co-integration models to analyze the collected data by using regression analysis tool Eview5.