China's Investment In Research And Economic Fluctuations

Economic fluctuations, is the situations which repeated took place, resulted from the mechanism in and out of economy. It also existed in our economy. The scale of investment affects the scale of the fluctuations.There were features of fluctuations in our economy. Before the reform, rate of fluctuations was great, peak of fluctuation high, valley deep, average growth rate low. After the reform, rate of fluctuation was small, peak down, valley up. Stability of economy greatly improved. Features of social fixed capital investment were great rate of fluctuation, high peak and deep valley. Rapid increase of investment alternated with rapid decrease.Experimental analysis demonstrated the following: There was no Granger influence between economic and investment growth-rate, but the correlation between GDP and investment did exist. The influence which investment put on the economic fluctuation was different between stages before and after the reform. During periods of the fall and rise of investment growth, the coefficient of GDP and investment growth-rate in the periods of the fall of investment was bigger then that in periods of the rise of investment. After the Reform the correlation between economic and investment fluctuations in stages of economic growth rise was poorer than in stages of fall; while before the Reform, the correlation both in stage of fall and rise were high. The influence, which GDP in this year put on investment of the following year, was different at different stages. Before the Reform ,at the stage of fall of economic growth. GDP of this year had a decreasing effect on investment of following year while at the stage of rise the effect was rather small. After the Reform, at the stage of rise of economic growth GDP of this year had on decreasing effect on investment of following year, while at fall had an increasing effect.In order to keep investment and economic fluctuations in benign cycle the practical range of 4.5-9.6%.correspondingly, investment growth-rate fluctuates in 17-23%.