Economic Growth Model Based on Six Basic Factors of Production─Xu Growth Rate Equation

Abstract

This paper proposes an economic growth model based on the Six Basic Factors of Production and Xu Growth Rate Equation for the first time, which fills-in the deficits of the New Classical Economic Growth Model based on the Solow Model. The empirical analysis indicates that over the past three decades, the consumption of six basic factors of production had complicated relations with economic growth. In some years, the consumption rate of the basic factors of production was meager, but the economy witnessed relative- ly rocketing growth rate; in some years, the factors of pro- duction consumption rate was very high, but the economy growth rate slowed down. In general, economy grows at the expenses of huge consumption of four factors. There is an obvious characteristic of huge input and low efficiency. The average contribution rate of technological advance peaks in the middle, while it drops down at two ends. Noticeably, since 2004, the technology contribution rate generally shows a downward trend, reasons of which should be explored sys- tematically in aspects like economic policy and industry structure with a view to boost further transformation of the macro-economy scientific growth model. profound researches, by now, there is no single theory of- fering an effective enough prescription to the economy of countries. Currently, some countries possess great wealth, but some countries are still stuck in poverty. This is an obje- ctive portrait of the dilemma of theory. Therefore, economic growth is still a difficult economic problem to be settled. Ev - ery year, a large number of research papers emerge about it. Just like a master once put it:as long as people begin to think about this problem,it's hard for them to think about other is- sues (Robert, 1988). However, we must keep the warning of Solow in mind:If there are not new ideas proposed,we will have no reason to return to this old problem (Robert, 1991). This article will propose a new economic growth model— economic growth model based on Six Basic Factors of Pro- duction,and build a corresponding growth rate equation ① . This new attempt might uncover a thread and observation. 2 The evolution of the economic growth the- ory