Analysis For The Relationship Between Chinese Fiscal Expenditure And Economic Growth

Fiscal is the basis and important pillar of governance, which is an important means of government to adjust and control the macro economy. In 2008, Chinese government launched the four trillion investment plan, in order to deal with the excessive economic decline caused by the global financial crisis. Since then, Chinese government has implemented proactive fiscal policy with a slow economic recovery and a growing fiscal deficit. Faced with the complex economic and financial situations in China, a correct understanding of the relationship between fiscal expenditure and economic growth, and to solve the problem of optimizing fiscal expenditure structure have become a focus of economic work at present and even the coming period in China, which are also a very urgent task to promote economic transformation and industrial upgrading. Therefore, the study has important practical significance.This paper study the relationship between fiscal expenditure and economic growth from the national and regional levels, using Excel and Eviews6.0 software, aimed to finding the path for regional economic development and a better fiscal expenditure. This paper’s research content as follows:(1)Relationship between fiscal expenditure and economic growthFirst of all, conduct a descriptive analysis of the change trends of fiscal expenditure and economic growth in China; Then, based on unit root and co-integration test theories,we get long-term co-integration and shot-term adjustment relationships of fiscal expenditure and economic growth by establishing econometric models; Finally, describe the dynamic change trends of economic growth to fiscal expenditure structure fluctuation,by the means of establishing impulse response function.(2)Relationship between regional fiscal expenditure and economic growth in eastern、central and western areasConduct a comparative analysis of the differences of fiscal expenditure and economic growth in eastern、central and western areas, using panel data models to analyze the effects of regional fiscal expenditure on economic growth. The empirical study shows: The positive effects of fiscal expenditure scale on economic growth in eastern and central areasare higher than western area. Fiscal expenditure structures in all areas have different effects on economic growth.