High-quality Economic Growth under the Influence of Technological Innovation Preference in China: A Numerical Simulation from the Government Financial Perspective

Bing Zhou, Xiaoyan Zeng, Lu Jiang and Bing Xue

Structural Change and Economic Dynamics, 2020, vol. 54, issue C, 163-172

Abstract: China's economy has been transitioning from labor-driven and capital-driven at a stage of rapid growth to innovation-driven at a stage of high-quality development. In this paper, government's “technological innovation preference” (TIP) is introduced into the traditional neoclassical economic growth model which is Ramsey-Cass-Koopmans (RCK), as a factor affecting the utility of endogenous growth model with capital accumulation and technological innovation. Assumed that the government fiscal revenue is used for public and research spending, through which we can examine its impact on high-quality economic growth and transmission mechanism, as well as how TIP influences on the economy. Results indicate that the tax rates and the growth rates would be raised, while the proportion of public spending would fall if TIP enhanced by the government. Furthermore, though steady-state output level may be lower in short term, however, it may also achieve high-quality growth in long run.

Keywords: High-quality economic growth; Neoclassical model; Technological innovation preference; Fiscal expenditure structure (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:54:y:2020:i:c:p:163-172

DOI: 10.1016/j.strueco.2020.04.010

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