Study on the Relationship between Government and Household Consumption

Consumption plays a key role in economic growth,and the total and household consumption rate in China are so low as to have influenced economic growth severely.Government consumption,consequently,should play a role as pulling up household consumption or smoothing the total consumption rate.But our empirical study does not support that.We suggest that measures such as enlarging social security output be taken so as to reduce household output expectation and effectively promote household consumption.Otherwise,government consumption level should be adjusted to keep the total consumption rate at a proper level.