Pure Public Goods Model and the Optimal Size of China's Fiscal Expenditure: 1978-2006


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From the perspective of maximizing the economic growth rate, this paper examined the optimal size of China’s fiscal expenditure with theoretical and empirical methods. First, the paper established a Pure Public Goods Model, based on which it further estimated that during the period of 1978-2006, China’s optimal size of fiscal expenditure is about 21.82-27.28 percent of GDP. Judging by this optimal criterion, it finally divided China's policy development into three stages: (1) the higher-size stage (1978-1992); (2) the lower-size stage (1993-1999); (3) the optimal-size stage (2000-2006)



Edited by:

Zhenyu Du and Bin Liu




Q. L. Wu, "Pure Public Goods Model and the Optimal Size of China's Fiscal Expenditure: 1978-2006", Applied Mechanics and Materials, Vols. 26-28, pp. 14-19, 2010

Online since:

June 2010





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