Analysis on the Driving Effect of Chinese Fiscal Expenditure on Economy

Abstract

Fiscal expenditure is one of the important means for the government to regulate and control the macro economy. In different economic development cycles, adopting different fiscal expenditure policies will produce different expenditure effects. The fiscal expenditure policy needs to be optimized to clarify its role in driving economic growth. Therefore, proper fiscal expenditure control is a necessary prerequisite for promoting high-quality growth of the Chinese economy. This paper uses the "IS-LM" theoretical model as the theoretical basis, starting with the multiplier effect of fiscal expenditure and output elasticity. It selects the data related to China's fiscal expenditure and economic growth from 2000 to 2019 to analyze and study the driving effect of China's fiscal expenditure on the economy. Studies have shown that stable fiscal expenditures are conducive to ensuring stable economic growth, and show a certain multiple relationship. In addition, this paper proposes to give full play to the sustainable effect of finance on the economy, and finally puts forward corresponding countermeasures and suggestions.