Crowding Out And Crowding In Effect About The Expansionary Financial Policy

A country's macro-control policy is consist of two main areas: fiscal policy and monetary policy. When facing the national economy has significant changes, the fiscal policy and monetary policy are basic and important tools to regulate and control country's economic. Especially using budget policy, debt policy, expenditure policy and tax policy, the force and the width of the use will generate important impact on the entire national economy and state finances. But there have been arguments about the effectiveness of fiscal policy in academia, especially in various schools of macroeconomics, and there has heated debate about that whether fiscal policy will cause crowding-out effect and crowding-in effect for private investment and whether fiscal policy and private investment seize resources. Academicians research on related issues by using different methods and different data. But till now, whether the proactive fiscal policy exists crowding-out effect or crowding-in effect for private investment is a still unresolved issue. Some scholars believe that since fiscal policy taking up the resources of the community, thereby crowding out the private investment market, to some extent resulted in "crowding out"effect. While the other scholars believe that the Government's intervention makes investment in related infrastructure. Improve the investment environment of the whole society, which will lead to a certain extent of private investment, that government investment had a certain "crowding in" effect. Moreover, some scholars believe that positive fiscal policy reflects the "crowding out" effect in the short term, show on the private investment "crowding in" effect in the long term. Despite this controversy, however, in reality, governments have been regarded fiscal policy as an important tool to stabilize the economy. Our Government also regards fiscal policy as an important means to regulate economic.In order to better study the actual situation of China, and use data to detect whether active fiscal policy will cause "crowding in" effect to private investment, in this paper, we study concretely whether active fiscal policy will cause "crowding in" effect to private investment. Because of the complexity of the economic problems we study, so the measurement method of the panel data is a good treatment tool. And the panel model also has a greater advantage than the average time series-panel model can reflect a different period of the law of the individual data, and also describes changes over time for each individual law, so panel data is a model that has two advantages of cross-section data and time series. Another view of this paper is to study the macro-economic issues- positive effects of fiscal policy, so we select the panel model as the basic research methods in this article, So that we can do a systematic and detailed research about Crowding out effect of private investmentcaused by our proactive fiscal policy. Because we will study the actual effect of our fiscal policy from macroscopic view, try to discover whether the government investment bring Crowding out effect on private investment, the total fixed asset investment amount is representative of typical variables, so we choice government and private investment of fixed assets investment as model variables in basic research. In view of the past, researchers at home and abroad are mainly verify the validity of fiscal policy in terms of the overall macro-fiscal, while in fact, we use separation of powers in our country's financial system, and the country's eastern, central, and western economic development is uneven, which will result in the effect of fiscal policy has a greater difference because of the different regions. Therefore, to more fully reflect the characteristics of line with our national conditions and the actual implementation of policies, in this article, we study circumstances of different regions in the international financial policy intervention with using the specific data of 31 provinces in the angle of view, and do an empirical test based on related data. When analysis fixed investment of each province of every year, according to the majority of the division of standards this article our country is divided into central, western and eastern parts of three parts, with separate data model to establish an independent panel to conduct the analysis of each test.Before taking the analysis, we should take unit root test at first, and then use F test and Hausman test to test which model should be to take. at last according to the test ,we get the panel data model in eastern area , central area, and western area in our country is random effects model, random effects models and varying coefficient model. Then the basis different area's construction of data has given the corresponding analysis as well as the suggestion. From the founding on the analysis, we can get that under the stimulation of the positive financial policy, all the areas in our country, there isn't exit significant "crowding out" effect, instead exit huge"crowing in"effect. With further research, we also find that there is different effect in different area, in particular, the"crowing in"effect in east area is the greatest. The consequence is not difficult to understand, because it is related with the level of economics and infrastructure in different areas. So according to China's actual economic situation of the region, this article has carried on the further analysis to get the proper plans and programs for different areas to promote development. In the end we suggest the government in our country should take appropriate guidelines and policies according to its local conditions. and continuously take effort in the infrastructure, talent introduction, technological innovation, industrial upgrading and optimization aspects of reform and improve, and then we can speed up regional economic take off, that's our goal.