An Empirical Study Of Beijing Public Expenditure Scale And Economic Growth

The relationship between government public expenditure and economicgrowth has been an important in macroeconomic research.Since there aredefects such as market externality, public goods,external as well asasymmetric information in the market economy itself, often lead to marketfailure exists, making the government’s macro regulation and controlinevitable. Public expenditure as an important means of governmentmacro-control, which can be regarded as the relative size of the total andthe role of government reflects the degree of market. The scale of publicspending is too large or too small will hinder the effect on economic growth,therefore, rationalize public expenditure impact on economic growth path, todetermine the optimal size of public expenditure, economic growth willproduce an effective role in promoting.This paper summarizes the existing theories and research findings, basedon the scale of public expenditure to build a research and theoreticalframework for the relationship between economic growth, the scale of publicexpenditure on economic growth affect the supply route into perspective andthe perspective of two spending paths from the expenditure perspective, thegovernment’s public expenditure will boost residents’ consumption and bypromoting private investment in order to promote economic growth; from thesupply perspective, public expenditure could provide capital to increasemanpower, provide institutional support and the advancement of technologythese four aspects stimulating economic growth. In accordance with theframework of theoretical analysis to select Beijing as the research object,measured using the method of simultaneous equations, analyze the overalleffect of public expenditure on economic growth.Through analysis it is concluded that: the overall effect of publicexpenditure on economic growth of Beijing since1982to promote the effect,in2010, the biggest contribution, then fell. Build a variable parameter modelof Beijing’s public expenditure for residents’ consumption, privateinvestment and technological progress effect is analyzed, we will find allthe Beijing public expenditure on the contribution of the three. The resultsshow that since the1990s, Beijing public expenditure on the performance ofthe three positive effects of stimulating and facilitating role. Further SVAR models were built on public expenditure, the dynamic effects of householdconsumption and economic growth, public expenditure, the dynamic effects ofprivate investment and economic growth, as well as public expenditure, thedynamic effects of technological progress and economic growth are analyzed,also stated in public expenditure on residents’ consumption, privateinvestment, technological progress and economic growth, with a greatercontribution, which also verified the proposed public expenditure impact oneconomic growth path is there.In this paper, the optimal size of publicexpenditures is calculated on Beijing, found that the optimal size of publicexpenditure as a proportion of GDP in Beijing by20.8%, while the current scaleof public expenditure accounted for26.8%GDP in Beijing was, publicexpenditure too large. Finally, based on theoretical and empirical findings,combined with their own situation and characteristics of Beijing, the BeijingMunicipal Government proposed should accelerate the transformation ofgovernment functions, while focusing on optimizing the size of governmentspending, give full play to the market mechanism, optimizing scientificresearch results into productivity path to actively promote financial systeminnovation, adjusting income distribution policy recommendations to furtheroptimize the size of public expenditure and give full play to the role of publicexpenditure on the promotion of economic growth.