GMM Evaluation of the Government Size to the Economic Growth Effects: the Empirical Analysis on the Municipal Panel Data

Government size effects the economic growth directly and indirectly, and its excessive expansion appears to be a worldwide problem. In order to study the impact of the government size on the economic growth in China, this paper attempts to evaluate the effects of the economic growth dynamically. The results show that enlarging the size of the government will inhibit the economic growth,then in order to promote the economic growth continually,reducing the size of the government is imperative.