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The Interactive Study between Private Consumption and Economic Growth of Tianjin

Author: DengJing
Tutor: FuLiPing
School: Tianjin University
Course: Technology Economics and Management
Keywords: Tianjin Private consumption Economic development interactive research
CLC: F126
Type: Master's thesis
Year: 2010
Downloads: 165
Quote: 0
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Abstract


Since the reform and opening to the outside world, Tianjin’s economy has developed rapidly. Especially during“the tenth five-year project”, Tianjin was given the opportunities and challenges by the new historical period. Consumption is the fundamental driving force of economic development; meanwhile, economic development determines the level of consumption. With the Tianjin Economic Area’s GDP growth, driving the urban-rural income rose. In this case, the level of consumption is also rising, and promoting the economic development. There is an interaction between the two, mutually reinforcing relationship. This article tries to analyze the consumer in promoting sustainable economic growth and the role of economic growth, the impact on household consumption, the final proposed to promote the growth of real consumption, operational measures and suggestions.Based on the consumption function theory and the theory of economic growth, this paper studied the residents’ consumption and economic growth in Tianjin. One of the innovations is the empirical innovation. And the other is the combination of use VAR model, co integration theory and vector error correction model. Using the Co integration theory research the long-term relationship between consumption of household and economic growth, and reached the conclusion that the resident consumption and economic growth have a long-term equilibrium; the consumer has a positive role in promoting economic growth. Later, through establish the VAR model, using impulse response analysis and variance decomposition analysis the short-term fluctuations between the two variables. And obtain the conclusion that the consumer can quickly bring the city’s GDP growth and have a lasting effect. On this basis, analysis the shortcomings during the process of economic development in Tianjin, and put forward the relevant policy recommendations by starting consumption, improve the consumption rate, which including the following points: speeding up the income distribution system reform; increase consumer income expectations, higher consumer confidence; to create a good environment for consumption.

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