Analysis Of The Optimal Public Investment Scale In China

As the financial crisis in 2008 and European debt crisis in 2010 one after another coming,China's economy faces unprecedented pressure,whether China's economic transition can be success,whether China's economic can achieve long term sustainable balanced growth become a focus of public discussion.Since reform and opening,government public investment plays a crucial role in China's rapid economic growth.Even in future economic growth;it still plays an important role.In today's public investment growing speed,observation on the relevance of government public investment scale in China and whether public investment promote economic development,then provide favorable reference to future public investment policy has important practical significance on China's economic development and improve the comprehensive national power.This article first define long-term economic balance?sustainable growth and public investment,summary and comment the related research at home and abroad.On that basis,this article qualitative analyzes the status of China's public investment and the impact on long-term economic growth in China.After that,based on long-term balanced economic growth framework,this article establishes optimal scale of public investment measuring theoretical model.Then empirical part analyses the factors influencing optimal public investment scale as well as based on dynamic panel data estimation public investment scale in China.According to theoretical analysis and empirical results,this article put forward relevant policy recommendation on how to promote the long-term economic balance and sustainable growth in China.Following are specific findings and conclusions:This article analyzes the current public investment situation in China and public investment effects on long-term economic growth.Analysis shows that current China's public investment are on the rise,regional and industry-scale distribution anomaly,public investment affect long-term economic growth from employment,capital accumulation,technological progress,consumption and industrial structure perspectives.This article theoretical analyses the optimal public investment scale based on long term sustainable balanced growth,contains two main components.One is to elaborate related theory of optimal public investment scale,another is set the model of endogenous growth,based on balanced economic growth perspective,measuring optimal size of public investment deduced from the theory of consumer utility maximization,enterprise profits maximization and economic growth maximization.This article empirical analysis the factors affecting the scale of public investment and estimate the optimal scale of China's public investment.Analysis revealed:Public investment scale has an negative relation with urban-rural income gap,population size,the number of employment,has an positive relation with open degree,urbanization degree,borrowing capacity,taxing cost and market degree.Through the establishment of dynamic panel data models,this article estimate the optimal scale of China's public investment is about 9.9%of GDP and private investment has an apparent extrusion effect on public investment.This article recommends several policies to promote long-term economic balance and sustainable growth in China.First is decrease public investment,focusing on structural adjustment,especially increase the ratio of expenditure on scientific research in education,optimize the structure of regional scale;Second is improve the efficiency of public investment,reducing the "crowding out" effect,main defined public investment areas,diverse funding sources;Third is improving public investment oversight and decision-making mechanisms,guarantee the optimal scale of public investment.Innovative idea is reflected in the following points.First,there is innovation in analysis framework.This article set up long-term economic balance and sustainable growth analysis framework based on micro-equilibrium,stressing the "continue balanced" growth concept;Second,innovation in methods.Empirical part use dynamic panel data models estimating the optimal public investment scale in China,compensate for the dynamic not sufficiently problem in predecessor estimation method.It is also worth mentioning that the conclusion corresponds to reality,but the accuracy of the results could be improved.And efficiency boundary of the optimal public investment can be a topic for future deep study.