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| On Dynamic Effects of China's Public Debt on the Three Industrial Growths |
| QI Hong-qian, ZHUANG Xiao-ji, XI Xu-wen |
| Centre for Quantitive Economics Research and Business School, Jilin University, Changchun, Jilin, 130012; Business School, Jilin University, Changchun, Jilin, 130012 |
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Abstract Issuing public debt is an important and effective way to implement expansionary fiscal policy and stimulate the three industrial and economic growths. Based on theoretical analysis, this paper uses the time series data from 1981 to 2013, and builds variable parameter state space models to study the dynamic effects of China's public debts on the real economy and the three industrial and economic growths. The empirical results indicate public debt flows and stocks have increasingly positive impact on China's real economy and the three industrial and economic growths. Besides, public debt stocks promote industrial growth better than debt flows. Debt flows have the most significant positive effect on the second industry while debt stocks give a greater boost to the third industry. Therefore, on the premise that we can keep the total debt under control, we should promote industrial structure adjustment and balanced development to achieve sustainable economic growth by reorienting?public debt investment.
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Received: 05 January 2015
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2015, Vol. 32 
