The Effect of Local Government Expenditure On Urban Residents Consumption In the Progress of Chinese Economic Transition:——An Empirical Study with Panel Data of Provinces from 1997 to 2009
The Effect of Local Government Expenditure On Urban Residents Consumption In the Progress of Chinese Economic Transition:——An Empirical Study with Panel Data of Provinces from 1997 to 2009
CHEN Kai1, XI Jing2
(1.Department of Statistics of Shanxi University of Finance and Economics; Taiyuan 030006, China；2.Department of Economics of Jinan University Guangzhou 510632, China)
Abstract This paper studies the effect of local government fiscal expenditure gross and structure on urban residents’ consumption by setting up an intratemporal substitution model of representative agent with Panel Data. The empirical results show that: (1)local government spending on administrative expenses has crowing-out effects on urban residents’ consumption; (2)government spending on economic and social aspects have crowding-in effect, but the latter has a weak effect; (3)Because of the unreasonable fiscal expenditure structure, the gross local government expenditure has crowing-in effects on urban residents’ consumption, but the effect is weak. The results shed some light on transformation of government function and restructuring fiscal expenditure in order to guide residents’ consumption and promote economic growth.
CHEN Kai,XI Jing. The Effect of Local Government Expenditure On Urban Residents Consumption In the Progress of Chinese Economic Transition:——An Empirical Study with Panel Data of Provinces from 1997 to 2009. Economic Survey, 2012, 1(6): 0122.
2012, Vol. 1 
