The Estimation Of Consumption Rate And The Relationship Between Consumption And The Growth Of Economy In China

Economic resources will be divided between types of investment and consumption. Consumption rate which is used to measure consumption in proportion of GDP is of great significance to the national economy growth. In recent years, to expand domestic demand and boost consumption is always being emphasized and the consumption rate in the statistic yearbook is a sequential decline which is far lower than the world average and is significantly lower compared with the typical developing countries. As the improvement of people’s living standard, the structure of consumption is also escalating. Statistical system cannot cover all aspects of consumption so the declining data cannot reflect the real situation of consumption. This paper is used MIMIC of the structural equation model to measure the real consumption rate by the macroeconomic data. And then we use the measuring data to analysis its effect on Chinese economic growth.This paper begins by describing the background and the significance of consumption rate, summarized research results, the contents and strategy of this paper in the first chap. The second chap mainly describes the consumption theory including western classic theories, the application consumption theory in our country and the change of the consumption rate in statistic year books. In the third chap, we measure consumption rate by MIMIC model. We choose exogenous and endogenous variables based on the analysis of the system of national accounts and finally get the measured data of consumption rate. The fourth chap is mainly based on the measured data to analyze the effect of consumption on the GDP growth by co-integration theory and the error correct model. In the last chap, we summarize the above and propose some suggestions.In this paper, the measured data is higher than the data on statistic yearbook and is also a downward trend in recent years but in smaller range and more slowly. The effect analysis indicates that the final consumption rate and economic growth have strong correlation and the co-integration test shows that there is a long-term equilibrium relationship between the two. Compared with the data on statistic yearbook, the measuring data has more weak effect on economic growth. In the short term, current economic growth has a positive correlation with current consumption and the last economic growth, and is negatively related to the last consumption.