Nonlinear Effect Model of Fiscal Expenditure on Economic Growth Based on Constrained Clustering Algorithm

In the current market, the adjustment of the market itself alone is far from being able to cope with the increasingly complex economic situation. Excessive increase in fiscal expenditure will have a crowding-out effect on private capital, weaken the private sector’s investment motivation, cause private investment to decrease, and restrict the growth of the real economy to some extent. In view of this, this paper explores the nonlinear effect of fiscal expenditure on economic growth based on constrained clustering algorithm, and builds a model in this paper. In order to verify the effectiveness of the model, further analysis is carried out through experiments. The experimental results show that when the ratio of government economic expenditure to non-economic expenditure is less than the threshold value of 70%, the estimated coefficient is 1.934, indicating that increasing fiscal expenditure has crowding-in effect on private investment. Estimating the optimal scale of fiscal expenditure and the optimal proportion of fiscal expenditure structure in India based on constrained clustering algorithm can undoubtedly provide important theoretical and empirical basis for reasonably maintaining the government’s efforts to regulate resources, scientifically and reasonably determining the scale of fiscal expenditure and judging the adjustment direction of fiscal expenditure structure in the future.

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