Research On Dynamic Mechanism Of Economic Growth In Inner Mongolia Based On Endogenous Economic Growth

In recent years, in Inner Mongolia region economic development is showing high-growth situation. Therefore, the study core of this paper is dynamic force of high-growth in Inner Mongolia region. A endogenous growth model which includes equipment and building capital is established. According to this model, the marginal returns of equipment capital is estimated, and endogenous technological progress is calculated through the marginal returns of equipment capital.This paper brings forward three propositions about measuring endogenous technological progress of capital: relative technological progress of equipment investment is equal to price rate of change of building investment or output relative to building investment; Marginal returns of equipment capital is directly proportional to technological progress of equipment investment; The gap between marginal returns of equipment and building capital is inversely proportional to relative price of equipment investment. On this basis, the article give a empirical analysis of technological advance in capital accumulation of the Inner Mongolia in 1986-2007. Trough comparing price index of equipment investment with price index of building investment and GDP deflator, endogenous technological progress of the equipment capital is analyzed. Then a endogenous growth model which includes equipment and building capital is established, and it is estimated by the state-space model. We obtain the dynamic value of equipment and building capital contribution to economic growth, and then obtain marginal benefit of equipment capital since 1986. The potential economic growth rate is estimated in Inner Mongolia through HP filtering. Finally, policy proposals of economic growth in Inner Mongolia are issued. The conclusions of our research are:First, trough comparing price index of equipment investment with price index of building investment and GDP deflator, we know in 1990-2007 average technological progress level of equipment investment in Inner Mongolia is at least 2.5%—3.5%Second, marginal returns of equipment capital has a downward trend, that is, endogenous technological progress level of equipment capital has fallen. But, in recent years, marginal returns of equipment capital still remains above 1.32, higher than the world average of 5 percent. Therefore, equipment capital is in the past few years, and will also be a strong driving force for economic growth in the next few years in Inner Mongolia.Third, the potential economic growth rate which is estimated in Inner Mongolia through HP filtering still remains above10% since 1990, in particular, 15% in recent years. But, it has a downward trend since 2003.As can be seen from the above three points, equipment capital is in the past few years, and will also be a strong driving force for economic growth in the next few years in Inner Mongolia. But, in recent years, endogenous technological progress has started to decline, meanwhile, the potential economic growth rate has also started to decline. Therefore , we can not blindly rely on the high investment to support high economic growth, or high growth is not sustainable. In the long run, to maintain high economic growth, increasing investment in research and development, that is, improving the level of exogenous technological progress is the only way.