Empirical Study On The Relationship Between Rural Finance And Economic Growth

Agriculture is the foundation of national economy, and rural economic development is the top priority of China's economic development. How can effective use of rural financial development measures to promote rural economic growth in China's rural economy become one of the hot topics. China's reform and opening up since 1978, the development of the national economy has been rapid, however, due to economic decision-making and industrial characteristics, the gap between urban and rural economy widened. To protect our economy to healthy, stable and sustainable development, it must strengthen the rural economy. In the modern economy, undoubtedly, finance is the booster of economic growth, and economic growth will be severely constrained by financial development lags. So, the relationship between the growth of rural economy and rural finance should be cleared, and the deficiency of the rural finance in promoting economic growth in rural areas should be listed, these two sides we mentioned above maybe the key to build a new socialist countryside, key to the development of rural economy, and key to improve living standards in rural areas.In this paper, descriptive analysis and empirical test are combined. And by taking these methods I try to test the relationship of rural finance and rural economic growth. First, the article describes the concepts and theories on economic growth in rural finance briefly, followed different aspects of economic growth in rural finance and the relationship between rural finance and rural economic growth were reviewed; after this, it try to make it clear that, from the vision of supply and demand, combined analysis with a large number of data, development of rural finance in China's history and current situation, and then using variable types of endogenous growth model to analysis the relationship between rural financial development and economic growth,so that we could examine the specific contact between three factors of rural financial development and rural economic growth. The empirical results show that the relationship between rural finance and economic growth is not a two-way contact. Finally, based on the results of empirical analysis, propose policy recommendations stem from the scale of financial development, structure, and efficiency, respectively.