Impact Analysis Of Economic Growth For Resident Consumption In China

Impact Analysis of Economic Growth for Resident Consumption in China Economic growth has long been a concern of each country.The economic growth rate is used to measure the signs of a country's economic development and progress.How to achieve economic growth for each country is crucial. From the view of demand point,the important factors in stimulating economic growth are consumption,investment and net exports.Therefore,consumption (including resident consumption) and the relationship between economic growth and resident consumption over the years has been the research focus of many scholars at home and abroad.Foreign scholars focus on economic growth and cause some relevant economic factors of economic growth,while domestic scholars focus on economic growth and consumption or the relationship between consumption,investment,net exports and the relationship between the different stimulating effect on the economy,to explain greater effect for resident consumption on economic growth.This paper is to study the effect changes of consumption on economic growth.The main theoretical and empirical analysis is divided into two parts.We ultimately explain the equilibrium relationship between economic growth and resident consumption,and the great stimulating effect of resident consumption.The first chapter introduced the research background and research significance of this thesis,scholars research situation and related literature review.On the basis of analysis on these,we proposed the research framework,the main content and methods of empirical analysis.Because the resident consumption can not only play a driving role in economic growth,but also a stabilizing force to prevent the recession.So the study of economic growth and resident consumption is particularly important.Some foreign models of economic growth can be worthy of this reference,such as Harold - Thomas model,its identities are g = s /k,when increasing investment and savings can promote economic growth.Savings,investments and consumption are closely related to a certain extent,which reflects the consumption demand and economic growth have the internal mechanism.Neoclassical growth model think that the main drivers of economic growth is capital growth and technological progress.Capital and labor is irreplaceable,emphasizing the role of market mechanism.As the capital and technological progress are closely related to consumption,to some extent also stressing the consumption is important in economic growth.Chinese scholars studied the relationship between consumption and economic growth from different angles.They had some similar conclusions.The second chapter analysed consumption and economic growth in theory.Firstly,we introduced the content of consumption and economic growth.Consumption means that a country or a person's total expenditures for consumption goods in a period . Consumption is divided into household consumption and government consumption.Household consumption means that residents consume goods and sevice.The Keynesian absolute income consumption theory,Dusen Bailey's relative income consumption theory, and other consumption theory,income is generally considered the most important factors affecting consumption.Economic growth means increasing the goods or services can increase output in a country.Total output is prensented as gross domestic product (GDP),and the changes of gross domestic product is used to measure economic growth.Consumption and economic growth mutually influence each other.Firstly,the economic growth can bring the increase of the resident consumption.That means economic growth can increase people's income,and then enable increase the resident consumption.While the rapid economic growth also can improve the quality of consumptio . Secondly , increasing resident consumption can pull economic growth.The resident consumption not only can directly stimulate economic growth,but also make other variables changed,and then drive economic growth.The third part described the resident consumption playing the role in the economic fluctuations.Because of the financial crisis,the exports were restricted and investments were passive.In such a situation,the government shifted the focus from expanding domestic demand to increasing consumption.This policy has proven to achieve positive results.The role of resident consumption in economic growth can be also further demonstrated.Indicators by data calculation and analysis,we obtained the consumer's average contribution to economic growth rate of 45.1%,while the investment's average contribution rate of 34.6%.The resident consumption's point is also greater than the investment and net exports.Although actively expanding consumer demand,promoting consumption structure to upgrade is the future direction for government work,in recent years,China's consumption rate has been in a state of decline.This paper argues that the reason for this phenomenon was mainly due to the imbalance of distribution of national income,wealth and income distribution gap being too large and the social security system being not perfect and so on.While the volatility of resident consumption impacting economic growth is more prominent.The consumption and economic growth is positively correlated,and they both show the characteristics of periodic change.So in the government's macroeconomic policy,if there is no consumption demand for supporting,only relying on investment,net export driving economy can not complete a new round of economic cycle,the economy can not achieve fast and stable growth. The final part is the empirical part.The data were used in 2009"China Statistical Yearbook"in GDP and consumption,and the actual time series datas were obtained by deflating.Since the two sequences have a clear trend of non-stationary time series,so we make unit root tests after their logarithmic first difference.The results show that in the case of 10% significance level and the intercept,we rejected the original hypothesis and believed the GDP and resident consumption were the first order difference stationary series.As the LGDP and LJMXF are I (1),we can carry out cointegration analysis to determine whether they were long-term stable relationship.After making ordinary least squares regression,we have identities of economic growth and consumer.The high goodness indicate a good regression results.The coefficient of resident consumption was 0.4163.So the resident consumption play a great role in economic growth and there are cointegration relations.Then we conducted error correction model to describe further long-term trends and short-term fluctuations.The results show that the consumption and GDP does exist a more stable long-run equilibrium relationship.From the analysis of the previous chapter,we learn that the current situation of China's consumption is in decline and analyze the reasons for formation of such a phenomenon.So this paper put forward some policy recommendations.Reduce the resident's psychological pressure for the future consumption.Reduce the income gap between urban and rural areas.Establish and improve personal credit system to encourage the healthy development of consumer credit.When our country increase consumption,we should notice the influence of above aspects.In this case,resident consumption can play a more role in economic growth and our economy can also develope stablely.