Fiscal Policy Research On The Effects Of Industrial Structure And The Countermeasures In Hubei Province

After the subprime mortgage crises in 2008 and the European debt crisis, two of the major trading partners of our country-the United States and the European Union are now experiencing the economic depression.The export of our country, which is an important way of economic growth, has been affected. Now our government is under the global environment of economic downturn. In order to maintain the economic growth rate above 8%, we released the investment policy of four trillion RMB, however this actually increased the housing bubbles which existed even before the crises and pushed up the prices. Under dual constraints in resources and environment, the ways our country relies on to develop economics-exports, investment and extensive production are not sustainable anymore. Under the new type of global economic development environment, our government began to shift the focus of policy to improve the industrial structure and the transformation of economic development mode. The advanced and reasonable industrial structure will promote the transformation of economic development mode. Meanwhile, the transformation of economic development mode will stimulate the target of optimizing the industrial structure. After the reform, as one of the central burgeoning provinces, Hubei province has greatly improved the structures of the three major industries and optimized the internal structures of three major industries, meanwhile the contribution rate of the three major industries to the economic development has changed, but some problems are badly needed to be solved in he adjustment of industrial structure. The optimization of the industrial structure requires proper industrial policy guidance, where fiscal policy is one of the most important ways for government macroeconomic control in optimizing the industrial structure. To select and implement effective fiscal policy will speed up the adjustment of industrial and promote the optimization of industrial structure and also stimulate economic growth. Thus, according to the interactive relationship between fiscal policy and industrial structure, analyzing specific effect of Hubei's fiscal policy for optimizing the industrial structure and proposing the countermeasures of improvement and perfection of fiscal policy are of great significance for promoting the optimization of industrial structure and sustainable economic development.The purport of this paper is to study the influence of Hubei's fiscal policy to industrial structure and based on these information propose some suggestion to perfect the fiscal policy. This paper reviews the basic theory of fiscal policy in promoting the optimization of industrial structure, analyzes the current situation of industrial structure including external and internal system during 1978 to 2013 Then on this basis paper uses expenditure date from 1999 to 2013 and from 1993 to 2013 and the output of the three major industries and inputs the data into the metering statistical software, after that it adopts the Multiple linear regression equation of econometrics, ADF test, Co-integration, Error correction model and Variance decomposition of VAR model, and conducts empirical analysis to the actual situation of Hubei's fiscal policy to optimize the industrial structure, then find out fiscal expenditure and fiscal and tax can optimize the industrial structure. Finally based on the conclusions of empirical analysis and economic analysis, Suggested Hubei province should give full play to the function of fiscal policy, focus on improving the quality of industrial development, and to develop the first industry, effectively guide the second industry, the key support of the third industry.