An Empirical Analysis of the Effects of Chinese Government Fiscal Policy on GDP Growth based on data frequency

Abstract

This paper offers an empirical analysis of the effects of fiscal policy on economic growth. We use vector auto regression technique（VAR-SVAR）to distinguish stabilizing，discretionary and promoting effects of government fiscal variables in China on its GDP growth based on data frequency. The variables used here are government expenditure, tax revenue, and GDP, and the index for all these variables are monthly, quarterly and annually time series data, among them annually data covering the period of 1952 to 2022 and monthly, quarterly data covering from 1998-1 to 2022-4. The empirical results indicate that the effects of Chinese government fiscal policy do exist and the GDP growth systematically react to the changes of these fiscal variables. But the effects based on monthly, quarterly data and annually data are different especially on promoting effect, this is something should be studied further more.