Author(s): Yu Fengze

Abstract: Economists on the connotation and extension of government debt has been different debate, its impact on economic growth has not formed a consistent point of view and method, even some theories on government debt analysis conclusions are very different. The main representative theories are "the harmful theory of public debt" of classical economics school and "the beneficial theory of public debt" represented by Keynesianism. Marxist political economics from the perspective of production relations, the connotation and extension of government debt has been deeply studied and discussed, the government debt as a means of financing, accelerate the original accumulation of capital. Since the founding of The People's Republic of China, in order to meet the needs of economic construction and development in different historical stages, The financing behavior and methods of Local governments in China have been constantly changing and improving in the course of development. Through the method of combining theoretical research and empirical research, this paper studies the relationship between Local government debt and economic growth in China after reviewing the classical economic theories and the development history of local government debt in China, and gives relevant policy suggestions.

Keywords: Political Economy, Local government debt, Economic growth.

Article Info: Received: 18 Dec 2022; Received in revised form: 16 Jan 2023; Accepted: 22 Jan 2023; Available online: 10 Feb 2023

DOI: 10.22161/ijels.81.19