An analysis of quantitative samples and experimental results concerning the interaction between education and economy by means of the theory and means of systematic dynamics shows that the average GDP per capita determines educational fund per capita, which in turn determines the number of fulltime teachers, which in turn determines the proportion of 6yearplus population of higher education, which again determines the average GDP per capita. Therefore, it is not a highefficiency policy for our government to raise the proportion of educational fund to the national GDP. A mode of development more suitable to our education and economy should be to add greatly to governmental investment in education specifically annually.

educational economy; systematic dynamics; development of education; economic growth