Causes of Inadequate Consumption in China:a Literature Review

Economists have recently researched consumption expansion in terms of consumption rate,causes of insufficient consumption,and countermeasures to consumption expansion.This paper reviews the literature and analyzes China's insufficient consumption with data of three decades.The results show that the main causes of China's insufficient consumption are high investment,high savings and unreasonable income distribution and that government spending increase curbs household consumption.Our results do not support such view that liquidity constraint is the cause of consumption expansion.