Analysis on Optimal Structure for Investment and Consumption

Of the economic theory,Chenery's standard structure described the empirical laws about investment and consumption relationship. The representative theories of the optimal structure for investment and consumption include: Solow model,Phelps golden law,Ramsey model,and AMSZ standard of Abel et al. To explore the optimal proportion for investment and consumption,a model is established based on the marginal rate of returns on capital and labor. In fact,the economy is usually in a state of non- equilibrium and so it should be acceptable that the proportion of investment and consumption is in a reasonable range. This study show s that the structure of investment and consumption in China is out of the reasonable range. Besides,the investment rate in about [35%,40%] and the resident consumption rate in about [45%, 55%]are both acceptable.