Empirical Analysis Of The Relationship Between Fiscal Expenditure And Household Consumption In Guangxi

Research in the relationship between public financial expenditure and household consumption has been drawing widely attentions, especial recent years, under the background of the recent slump household consumption in China. The lag of household consumption in China had already brought about significant negative impact to the macro economy of China. A series of adjustment measures, from the perspective of fiscal policy, were conducted to stimulate domestic demand, especially household consumption. Fiscal policy as one of the most important government macro-control means is crucial to stimulate consumption and promote economic growth. Meanwhile, fiscal spending (also called government spending or public spending) as the main levers of fiscal policy, the amount and structure of which is closely associated with the consumption of local residents.12five is a new era of promoting development of the west china. As a representation of the western province, Guangxi is in a critical period of building a harmonic society and accelerating the construction to become an economically strong western province. To properly arrange the developing of this period, the important practical significance of Guangxi should improve the public service system. In order to stimulate the consumption of local inhabitants, and then boost the regional domestic demand growth.Speaking from the theoretical significance, different countries and regions study the impact of the financial expenditure on consumer demand at different times, they will all produce different results. At the same time, different academic factions and renowned scholars build their own theoretical model of economic assumptions for the different premise. They are multiplier theory, crowding-out effect and the interaction mechanism between the both. On the one hand, Keynesianism departure from the multiplier theory, considering only current income, it is a complementary relationship between financial expenditure and household consumption, and the increase in government spending will stimulate the consumer. On the other hand, the neoclassical think the increase in fiscal expenditure will be through the negative wealth effect and the intertemparal substitution effect caused by extrusion of the consumer, that there is some kind of competitive, adversarial relationship between government spending and consume, Thus there is crowding-out effect of government spending on the consumer. There is not only the commonality of international and domestic, but also some of the features of the region to the evaluation of the relationship between fiscal expenditure and household consumption in Guangxi. It uses the least square method to quantitative analysis of the relationship between the total fiscal expenditure structure and consumer in Guangxi by multiple linear regression model from the time series since the reform and opening up. As a result, on one hand:form the study on the fiscal expenditure amount and consumption amount, it is concluded that the expenditure of Guangxi is dramatically elastic, which is positively correlated to the household consumption of the area. What’s more, the expenditure has not yet reached an optimal scale, which suggested a growth margin. On the other hand, it is showed that education expenditure, fiscal spending on social security and state expenditure on general administration has the positive effect on household consumption, whereas financial expenditure on agriculture and medical&health spending have no obvious effect on the consumption.Based on both theoretical and empirical analysis on the existing problems regarding the total amount as well as the structure of fiscal expenditure, it came up with several pieces of rational advices. It’s believed that the total amount of government expenditure should maintain growing by the following years; meanwhile the adjusting and optimizing structure should be enhanced, Thus to improve the efficiency of fiscal expenditure. In particular to improve the efficiency of the use of funds to support agricultural expenditure; strengthen education and health infrastructure, and efforts to improve education and health conditions; increase in social security spending and improve the social security system, focus on building a government-led multi-level comprehensive social security system. For the administrative expenditure, the preferred choice is to transfer the government’s function, deepen the reform of the mechanism, and clear the scope of administration; secondly, regarding the supply of funding for administration units, the limits of expenditure amount should be applied, moreover, increase efforts on controlling the flexible spending, thereby promoting the household consumption in Guangxi.