Financial Repression, Urbanization, Urban-Rural Income Gap

In recent years, with the deepening reform in China system, especially in the field of the income distribution,the living standards of both urban and rural residents have been greatly improved, nevertheless, the income gap has been continually widened, among those, the income gap between the urban and rural residents is the most obvious, and have already influence our society stabality and economic growth. Urbanization can transfer surplus labor in rural to city,which will increse productivity of rural labour and income,fillaly,and narrow the urban-rural income gap. However, to give play to the function that urbanization narrow the income gap in the maximum,we must accelerate urbanization,and let more farmers move in the city.Urbanization construction requires a lot of money, therefore, urbanization can rise to the financial support. Financial support for the urbanization,and urbanization narrowing the income gap, therefore, under the situation of financial repression phenomena existing generally in china,studying the the relationship between the income gap and urbanization and making a suggestion of narrowing income gap, has a certain theoretical and practical significance.This paper can be divided into four chapters, the first chapter is the Introduction, It has mainly introduced the research papers'backgroud,sigificance,ideas,methods,and Innovation and issues related to the research.The second chapter has made some simple statistics describes about urbanization and urban-rural income gap.The third chapter is the core chater in this paper,firstly analyzes the mechanisms between financial development and urbanization,and between urbanization and income gap,then constuct the thoretical model,finally do the empircal analysis of financial repression,urbanizion and income gap using panel data model of dynamic.The fourth chapter gives the conclusion and policy suggestions.There are three innovation points in this paper.Firstly,we disscussed the relationship between the urbanization and urban-rural income gap,and put forward the mechasim and theoric model about financial develepment and urbanization, urbanization and urban-rural income gap.At home,this idea is few. Secondly, in this paper,our selection in the index of urban-rural income gap is more scientific than other articles.Thirdly, we join the first-order lag of income gap in our model,to identify the inertia of the income gap,and overcome the influen of endogenous,which ralely considered these two factors in other articles.This paper presents these main conclusions.firstly,the income gap has strong inertial.In our empirical analysis,the first-order cosfficients for income gap is 0.9185,and highly significant strongly,which suggests the income gap has stong inertial.Secondly,urbanization narrowed the income gap.In our empirical analysis,the coefficient of urbanization to the income gap is negative in 1% significant level,which suggest that the urbanization process's accelerating significantly narrow the income gap. Thirdly,the interaction between financial development and urbanization is significant in 10% significant level,but not strongly and the coefficient is relatively small,which suggests that the role of financial development supporting urbanization is insufficient. Finally,with the perfection of the financial system,the effect that urbanization narrow the income gap increasingly are strengtheed.In our empirical analysis,we can conclude that when the development of financial market is at the lowest,the effect of urbanization in the income gap is not significant,and when the development of financial market is the national average level,the effect of urbanization in the income gap is significant.This suggest that the development of financial market is from the lowest level to the national average level,the effect is increasingly setrengthed.