The Influence of Chinese Government Expenditure on Resident Consumption: Research Based on DSGE Model

This paper constructs a DSGE model to research the influence of China´s fiscal expenditure on resident consumption. The study shows there is extrusion effect in China´s fiscal expenditure. However the model simulation shows that, through increasing the complementarity between fiscal expenditure and resident consumption, we can turn extrusion effect into packed-into effect, thus make the fiscal expenditure both increase output and stimulate consumption.