Evaluation And Optimization Of Chinese Fiscal Policy On The Economic Growth Effect

Economic growth effect of fiscal policy has long been a research hotspot by scholars at home and abroad. Based on Barro-Sala-Iraq-Martin's fiscal expenditure growth model, this paper calculates the optimal size of the government expenditure with OLS method whose data has been filtrated by the HP filter. The result shows that the optimal ratio of government expenditure to GDP is about 25.95%. Meanwhile, with the transformation of the same theoretical model, the paper also carries out an empirical analysis on the optimal macro-taxation. The conclusion shows that the optimal macro- taxation should be 24.3% of GDP. For distinguishing the provincial performance of fiscal policy, this paper makes a further analysis on the different efficiency of fiscal policies among 30 administrative provinces (municipalities or autonomous regions) with DEA method. The result shows that the eastern economically developed areas have a higher efficiency, but the central and western economically underdeveloped areas have a lower efficiency. Based on these conclusions, the paper offers practical suggestions on policy optimization.