Abstract:Higher education and economic growth can promote each other under some conditions. The authors establish the new production function model with higher education development variable on the base of the CobbDouglas production function. Using the times series data from 1985 to 2006, making use of Granger Causality Test, theyempirically study the effect of higher education development on Chongqing’s economic growth. The result shows that higher education development can promote Chongqing’s economic growth in the shortterm, but the longterm effect is not significant. The positive effect that economic growth has on higher education is very limited. In the end, they makes some relevant suggestions on establishing good circle between higher education and economic growth in Chongqing.