Consumption and Economy

Consumer demand in the economy and the virtuous cycle of steady growth have a decisive role. A country to maintain long-term, stable economic growth, it is necessary to maintain a reasonable consumption.

Economic growth mainly depends on the stimulation of investment. Consumer demand for economic growth and economic stability is mainly reflected in the following areas.

Final demand, as consumer demand, economic growth and plays a direct role in the final decision. From social reproduction, the investment demand is intermediate demand, consumption is only the end of social reproduction and a new starting point. Consumer demand, in a sense, determine the total demand and investment demand. Especially from the medium and long term, there is no consumer demand will be supported by investment in inefficient, and ineffective investment is no guarantee that sustained, rapid, coordinated and healthy development.

In stimulating economic growth, consumer demand for the greatest contribution to economic growth. From the demand point of view, to promote economic growth factors of consumption, investment and net exports of the three large pieces. For the three in terms of economic growth in the role of people's visual impression for many years seems to be the investment of the largest economic growth, but empirical studies have shown that consumer demand for the economic growth rate much higher than the investment demand and export demand is The main driving factors of economic growth.

Consumption rate on the investment rate has a decisive role. Consumption rate and investment rate is not simply a shift in the relationship between the consumption rate on the investment rate, in essence, has a decisive role. In macroeconomic analysis, consumer decision-making is the savings at the same time decision-making, just as the two sides of a coin. Savings and investment links with the essence of that money to provide funding sources for investment. Therefore, if you want to have a lower investment rate, the first thing is to have a lower savings rate, that is, the higher the consumption rate as a basis. Directed against the high rate of investment to take measures in the short term may play a role, in the long term did not seize the nature of the problem.

Consumer demand is not only the dominant driving force for economic growth, but also alleviate the economic stability of the power fluctuations. Consumer demand in the stability of economic fluctuations in performance, it is always less than the volatility of the volatility of investment demand and the volatility of GDP, and often lag behind the fluctuations in investment demand. Due to the volatility of GDP is consumer demand and investment demand, that is, fluctuations in the consolidated results of the superposition of the two, so the relative stability of consumer demand is an important cyclical fluctuations of economic constraints. Consumer demand is relatively flat and can undermine the investment demand to a large extent to the national economy brought about by fluctuations in turbulence, to alleviate the ups and downs of the national economy. Consumer demand as the national economy in the final demand, investment demand has always been bound by the fluctuations. A rapid increase in investment demand, due to relatively slow increase in consumer demand, thus limiting the growth of investment demand, whereby slow down the growth rate of investment demand; and the rapid decline in investment demand, due to the slow decline in consumer demand, investment demand in the early decline in consumption decline in demand with little or remained unchanged, and thus have a spontaneous containment on the role of economic recession.