The Research on the Relationship of Domestic Investment, Government Consumption, Household Consumption and Economic Growth -an Empirical Study of Fujian Province

With Fujian Province as object of study, panel data from 1981 to 2012 is selected in this paper. Besides, VAR model is established. Co-integration test, Granger causality, impulse response function and variance decomposition are used for quantitative analysis on correlation between domestic investment, government consumption, household consumption and economic growth in Fujian Province. The author reveals long-term stable balance among investment, government consumption and household consumption in Fujian Province as well as bidirectional causal relationship between economic growth and domestic investment, government consumption and household consumption. For a short term, household consumption is of relatively strong positive impact effect on economic gain, which is served as major impetus of economic growth. Domestic investment is of relatively obvious promotion for economic growth in a short term and of certain negative effect on economic growth in a long term. However, government investment is of relatively small positive impact to economic growth. Such promotion lasts for a longer period. On this basis, the author proposes some policies and recommendations for macroeconomic regulation and control in Fujian Province.