An Empirical Analysis On Xinjiang Finance Expenditure On Residents’ Consumption Demand

Economic development in Xinjiang has made considerable progress with highGDP growth, improved living standards since the reform and opening up. But can notbe ignored, Xinjiang’s economic and social development, there are still many issues tobe addressed letter, high investment, low consumption of unreasonable economicdriving mode caused by the structural imbalance of the Xinjiang local economicgrowth, government failure, externalities, lack of social security mechanism as aresult of livelihood areas has accumulated a large number of social conflicts. In thiscase, it is particularly important that we should explore a way to promoteconsumption, but also to improve the economic and social development. However, themarket is unable to adjust itself to achieve this "best of both worlds" effect, then theuse of fiscal policy by the government to intervene to make up for the inevitablechoice of market failure, the financial expenditure is generally considered the mostdirect and effective fiscal policy tools.This paper first describes the mechanism of finance expenditure on consumertheory. Secondly, analysis on the Xinjiang finance expenditure and consumptionexpenditure of urban and rural residents developments and changes in the status quo,and to explore the Xinjiang consumer downturn and the gap between urban and ruralresidents. Then build the financial expenditure was econometric model of therelationship between urban and rural residents’ consumption expenditure and financialexpenditure consumption gap between urban and rural residents based on theconsumer inter temporal substitution optimal control model. Last use the time seriesmodels to the1978～2010Xinjiang time series data for testing.The study indicates that finance expenditure increased improve to increaseconsumer consumption affect the large differences in the structure of financialexpenditure of urban and rural residents. the structure of finance expenditure inaddition to the economic construction spending, consumer gap have different effects.Administrative expenditure not only inhibits the consumer, but also to expand theconsumption gap between urban and rural residents. The income of urban and ruralresidents affect of the consumption of urban and rural residents still great. The incomegap promotes the consumption gap between urban and rural residents. Financial expenditure on the consumption of urban and rural resident is different. The structureof finance expenditure on the impact of the urban and rural resident’ consumption, soas to prove that the efficiency of finance expenditure is low, and the fiscal expenditurestructure is irrational.In the last part, put forward countermeasures according to the empiricalconclusions. We should add to finance expenditure, optimize the structure of fiscalexpenditure, improve the efficiency of finance expenditure economic developmentand improve people’s income, improve the social security system, promote thetransfer of industries and improve the consumption environment perspective topropose a solution expansion of consumer Xinjiang.