The Study Of Crowd-In And Crowd Out Effect That Government Investment Put On Private Investment In China

Since the reform and opening-up, the concept of investment come to be widely known, investment began to play an increasingly important role in the national economy.Investment, consumption and exports are driving the rapid economic development in China, they are so called "Troika", in which, the investment have an absolutely strong position..Investment can be divided into government investment and non-government investment base on investment entity, and non-governmental investment mainly refers private investment. Classical economic theory on the relationship between the government and private investment made a different interpretation, IS-LM model shows that government investment will crowd-out private investment; Aschauer theory suggests government investment will crowd-in private investment. Review of domestic and foreign scholars study of the relationship between the government and private investment discovery of this issue, so much of the studies did not produce a widely accepted conclusion. Does government investment crowding-out or crowding-in private investment? What is the reason? We should do deeper research. The answer of this question is of particular significance to the current development of China. Especially in the new normal economic times, in order to keep the economy developing healthily and sustainably, we need government take positive macro-control measures more eagerly. However, the impact that government investment put on private investment is uncertain and implementation of appropriate investment policies must take this as a precondition.In this research, i summarize the existing studies with classification methods, then, i select the total amount of economic data from 1982 to 2014 to use empirical analysis. We arrival at a completion that government investment have a positive role in promoting private investment in long-term but have a opposite influence in short-term. What is more, i combine theory with practice of China, we analyze the reasons deeply, and in the end of this paper, i give some suggestions. I hold the point that firstly, we should control the scale of government investment, and optimize government investment structure. Secondly, government investment should be dropped out from competitive industries orderly. Thirdly, it is important to improve the efficiency of government investment. Of course, we only examined the relationship between the two macro aggregates. Scholars need to do further research to determine our government investment put what impact on private, crowding in or out, or no relationship. Only in this way can it better serve the financial policy formulation and actual economic growth.