This paper presents the analytical results of substitution and complementary effect of fiscal changes, by applies the variance decomposition technique to totally isolate the growth effect of components in government＇...This paper presents the analytical results of substitution and complementary effect of fiscal changes, by applies the variance decomposition technique to totally isolate the growth effect of components in government＇s public expenditures on GDP. We concluded from the empirical analysis, that the government＇s purchase expenditure （Gc） has a significant explanatory power on the long-term economic growth. However, extra budget expenditure （YWZ） and the government＇s fundamental investment （TR） only have substitution effects with limited impact on the long-term economical growth.展开更多
文摘This paper presents the analytical results of substitution and complementary effect of fiscal changes, by applies the variance decomposition technique to totally isolate the growth effect of components in government＇s public expenditures on GDP. We concluded from the empirical analysis, that the government＇s purchase expenditure （Gc） has a significant explanatory power on the long-term economic growth. However, extra budget expenditure （YWZ） and the government＇s fundamental investment （TR） only have substitution effects with limited impact on the long-term economical growth.
