An Empirical Study Of China's Fiscal Expenditure And Economic Growth

Financial expenditure is one of important means of government to get involved in the economy,and economic growth is the core goal of economic policy in many countries.Western economic theory believes that the relationship between fiscal expenditure and economic growth is mutual promotion,but experience shows a different conclusions.The 2008 financial crisis, the world economy has been seriously challenged,our country is no exception, decline in economic growth has become the principal contradiction in the economy at that time. In order to resist the impact of financial crisis, our government timely introduced the "four-trillion" investment fiscal policy, and "to maintain growth, and promote development" as the focus of economic work in 2009. Therefore, the study of China's financial expenditure and the relationship between economic growth and of great practical significance.Expenditure impact on the economy is mainly manifested in two aspects, one is the size of fiscal expenditure, and the other is the fiscal expenditure structure. The former one not only affect the implementation of government functions, but also directly affect the degree of social resource allocation. Government intervention in the economy there is an optimal size, greater or less than the size would be detrimental to economic growth.While, the expenditure includes a number of projects, different projects have different impact on the economy therefore a reasonable structure of financial expenditure is to promote the effective guarantee of economic growth. Only at the appropriate scale of the financial expenditure and a reasonable financial expenditure structure, China's financial expenditure on economic growth will maximize the catalytic role.In this paper, based on the relevant theoretical research at home and abroad, I choose a combination of qualitative and quantitative analysis methods to analysis size and structure of fiscal expenditure and the relationship between the fiscal expenditure and economic growth. The study found that the size of China's financial expenditure has a significant role in promoting China's economy. And the optimal scale of the expenditure is 19.49%. At the structure of financial expenditure, economic construction, social culture and education, and defense spending on the economy has significant positive effect, while the administrative expenses and other expenses on the economy has significant negative effects. According to the conclusions of this paper, combined with China since the 2008 financial crisis, fiscal expenditure policy, comprehensive evaluation of the implementation of the policy effects of fiscal spending, and put forward relevant comments and suggestions.