Investment in Fixed Assets and Economic Growth——An Empirical Analysis of China's Economy from 1978 to 2003

Based on the data of GDP and investment in fixed assets of China from 1978 to 2003,this paper analyzes the relationship between the two variables by using econometrics methods such as cointegration test, error correction model and Granger-causality Test. The empirical result shows that there exists bidirectional causality and long-run steady relationship between investment in fixed-assets and the economic growth of China.