Research On The Relationship Between Financial Expenditure And Economic Growth Based On Return To The Adaptive-Lasso

The relationship between fiscal expenditure and economic growth has gained much attention.Improving the fiscal expenditure structure system will contribute to the economy of a country or a region developing healthily and steadily.Guizhou is an important province in the western development,and its economic data is representative to a certain extent.In order to accelerate the development of various undertakings in guizhou,in addition to the guidance of policies,it is more necessary to take finance as a strong backing.Therefore,it is of great significance to explore the impact of fiscal expenditure on economic growth in guizhou.Based on the GDP and fiscal expenditure data of guizhou province from 2007 to 2017,this paper applies statistical methods such as principal component regression analysis,Adaptive-Lasso regression analysis and Adaptive-Lasso regression analysis to study the relationship between fiscal expenditure and economic growth of guizhou province.Firstly,the collinearity test is carried out on the 12 indicators of fiscal expenditure.There is a seriously multicollinearity among the fiscal expenditure indicators,so the linear regression model of GDP and fiscal expenditure indicators cannot be established directly.Therefore,the principal component analysis is carried out for each fiscal expenditure index.Two principal components are extracted,and the regression model between GDP and the two principal components is established.The goodness of fit of the model is good,and the principal component regression model is reasonable.Secondly,the Adaptive-Lasso regression method was used to establish the regression model of GDP and various fiscal expenditure indicators.The Adaptive-Lasso method eliminated most variables and only used the variable of public security expenditure for fitting.This model lost other fiscal expenditure information that affected economic growth.The Adaptive-Lasso principal component regression method was used again to establish the regression model of GDP and two principal components.Through further model comparison,the principal component regression model based on Adaptive-Lasso is better than the other two models,which can well fit the relationship between fiscal expenditure and economic growth in guizhou province,and gives a reasonable explanation to the economic significance of this model.The research shows that the scale of fiscal expenditure has obviously promoted leconomic growth.In the structure of fiscal expenditure,except for the negative effects of transportation expenditure and national defense expenditure on economic growth,the other 10 fiscal expenditures all have positive effects on economic growth to varying degrees.