A Study On Relationship Of China’s Financial Expenditure And Economic Growth

Fiscal policy has become the world’s major macro-control means, in the maintenance of social stability, income redistribution, to maintain stable economic growth and so has a unique role. Implementation of fiscal policy mainly through the government budget and taxation, on the basis of economic development, on the revenue and expenditure adjustments and allocation. Expenditure and revenue are both the same thing, if the revenue is the basis for state operation, the state financial expenditure is to ensure the normal operation of an effective way. Cyclical fluctuations in the economy will produce such as recession, unemployment and so on, to make a sound development of the country’s economy is in expansion or in need through contractionary fiscal policy to smoothing economic fluctuations. Therefore, the Study of China’s fiscal expenditure (size and structure) and the relationship between economic growth has important theoretical and practical significance.Between expenditure and economic growth is exactly what kind of relationship, which in the end can really promote economic growth? If the expenditure on the economy to promote the role, which is strong or weak? Expenditure on the economy were all of different projects to promote or hinder the role of the existing structure of financial expenditure is reasonable, whether the role of promoting economic growth is the best? In this paper, China’s fiscal expenditure and the relationship between economic growth for the study, the analysis of1978-2010China’s fiscal expenditure and GDP trends, based on the use of vector autoregressive model and causality test methods such as analysis of China’s fiscal expenditure and the quantitative relationship between economic growth and affect other aspects of delay-depth study.Text is divided into four parts. The first part of an overview of the concept of financial expenditure, the second part of the study of China’s total fiscal expenditure and the relationship between economic growth, estimated the number of models show that China’s fiscal expenditure increased by1unit of gross domestic product of0.67occurs incremental changes. The third part of China’s fiscal expenditure structure and economic growth, and setting up the vector auto-correlation model, using cointegration and impulse response function analysis of the structure of fiscal expenditure variables on economic growth and delay the size of the problem:GDP on infrastructure spending, tapping the potential of transformation, Science and technology three fees, expenditure on agriculture, culture, education science, health, administrative management fees has a positive effect; on defense spending, social security expenditure is a negative effect. Finally, conclusions are given by the fourth part of the adjustment and optimization of China’s fiscal expenditure policy recommendations.The innovations in the dissertation are as follows:This innovation is the:use of vector autoregressive models and impulse response function, carried out the scale of fiscal expenditure, structure and correlation of economic growth, and fiscal expenditure structure in the direction of economic growth and impact of in-depth discussions.