Author(s)

Airu Wang

Corresponding Author

Airu Wang

Abstract

Based on the PVAR model, this paper studies the dynamic relationship between financial expenditure, scientific and technological progress and residents' income level by using China's provincial panel data in the past 20 years. The results of co-integration test show that there is a long-term stable relationship between the three. The results of PVAR model show that scientific and technological progress and resident income level are Granger causes for each other. Government revenue and expenditure is a one-way Granger cause of people's income level. The increase of fiscal expenditure and the progress of science and technology have a continuous and significant positive effect on the income level of residents. The improvement of residents' income level will also lead to the growth of fiscal revenue, thus promoting the growth of fiscal expenditure and the progress of scientific and technological development. Therefore, we should optimize the structure of government expenditure and promote the development of science and technology.

Keywords

financial revenue and expenditure; scientific and technological progress; resident income level; PVAR model