Study On The Effect Of Financial Expenditure Structure On China's Economic Fluctuation

As our country enters the new period of comprehensively deepen reform;the optimizing of fiscal expenditure structure has became a significant guarantee for the sound and stable economic development.On the basis of previous studies,this paper analyzes the inner mechanism between financial expenditure structure and economic fluctuation,and use the SYS-GMM method to test this relationship based on China's provincial panel data from 1995 to 2015.Theoretical analysis shows that productive expenditure has dual influence on economic fluctuation:during the moderate-development period,productive expenditure will aggravate economic fluctuation due to local government's investment impulsion,while during the economic recession,it will smooth economic fluctuation by complementing the lack of private productive-investment.At the same time,government's maintenance expenditure will exacerbate economic fluctuation by promoting consumption fluctuation and reducing the efficiency of macro-control.However,social service expenditure can smooth economic fluctuation with the function of auto-stabilizer.Empirical evidence shows that during the moderatedevelopment,the raise of productive expenditure ratio and government's maintenance expenditure ratio has upward impact of economic fluctuation,while the raise of social service expenditure ratio has downward impact of economic fluctuation.Furthermore,during the economic recession,productive expenditure presents a negative relationship between economic fluctuation.The increment of productive expenditure ratio can slow down the international financial crisis impact on our country.Based on the above analysis,in order to further optimize the structure of fiscal expenditure and smooth the macro-economy operation of our country,we puts forward some policy recommendations as follows:Firstly,determining the investment intensity of various fiscal expenditure according to the actual demand of social economic development and implementing the structural fiscal expenditure policy.Secondly,reduce the scale of government maintenance expenditures and the administrative costs,improve the governance efficiency and the macro-control ability.Thirdly,focusing on the continuity of economic activities,maintain the stability of social service expenditure.Fourthly,grasping the timing of fiscal expenditure policies,enhance flexibility of productive expenditure policies.