Microcosmic Base for Promoting Domestic Demand under the Global Financial Crisis——A Study on MPC of China Inhabitants

This article takes an empirical study on the trend of Chinese urban resident s MPC(marginal propensity to consume) of 1978-2005,with the method of gradient regression.

This paper points out that under the conditions of new economy the co nsumption takes immaterial one to heart, therefore the MPC (marginal propensity to consume) goes up, and several positive data proves this conclusion, and expla ins the sustainable growth and growth recession of the new economy and some othe r problems oc the development of the new economy.

Appraisals of the Methods of Marginal Propensity to Consume;

Chinese urban residents′ consumption structure during ten vears′ period is andlysed,the Engel coefficient is measured and by using extended linear expenditure system,an analysis and forecast of the marginal propensity to consume along with the income elasticity of demand are pro.

Further more some political suggestions were proposed in two aspects,which are increasing the permanent income and raising the relevant marginal propensity to consume,to improve farmer s consume.

Study of the changes in the marginal consumption propensity of Chinese town residents;

It then examines and compares the different insurance marginal consumption propensity in China.

Based on the data of Jini index and marginal consumption tendency,we explore the influence extent on the whole society consumption stagnation imposed by the income gap of Chinese residents.

Drawing the conclusions: First, urban and rural residents expenditure behaviors can be explained by persisting income model and absolute income model adopting dummy variable individually;Second, rural residents expenditure level is descending, and the income gap between them is expanding, but marginal consumption tendency of the rural residents is larger than the urban resi.