Socioeconomic Effects of Fiscal Expenditure: Based on the Analysis and Optimization by Panel Random Forest

Abstract

Abstract:

In order to determine whether the effect of China's total fiscal expenditure and its structure on the socioeconomic development has an inflection point, and whether there is an optimal scale and optimal structure for fiscal expenditure, a panel random forest method is used to analyze the non-balanced panel data of 52 countries from 1995 to 2016. The panel random forest is based on historical regression tree, which is an improved algorithm of traditional regression tree. On the basis of the results of panel random forest, the optimal scale and optimal structure of fiscal expenditure to promote economic and social development are obtained. The conclusions show that there is an inflection point and a reasonable interval of the effects of total fiscal expenditure and the expenditure of general public services, economic affairs, cultural entertainment and religious and education (proportion of GDP) on socioeconomic development. In addition, the expenditure of health, environmental protection and social security have a significant positive effect on socioeconomic development. Based on the conclusions, the optimal scale and optimal structure of China's fiscal expenditure according to China's national conditions are given, the policy recommendations for optimizing China's fiscal expenditure and expenditure structure is also included.

Key words: financial expenditure structure, panel random forest, socioeconomic development, reasonable interval

Li Na, Li Xiuting, Wei Yunjie, Sun Yi. Socioeconomic Effects of Fiscal Expenditure: Based on the Analysis and Optimization by Panel Random Forest[J]. , 2018, 30(10): 258-269.

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