An Empirical Study of The Influences of Public Expenditure Scale on GDP in China

This paper uses the citizens' consumption function based on the Cobb-Douglas production model and deduces the most favorable consumption rate and stable economic growth rate. We find that the government expenditure scale is optimized when the tax rate equals the marginal production elasticity of government expenditure. Through empirical study of our country's government expenditure′s influence on economic growth, we also find that the government expenditure scale has positive correlation with economic growth rate.