The Pirical Analysis Between Economic Growth And Urban-Rural Income Disparity In Inner Mongolia

With the improvement of real per capita income in Inner Mongolia, the urban-rural ratio has been rising constantly and the urban- rural income disparity has been enlarging increasingly since 1978. This paper has tested the "Inverted-U hypothesis" for urban-rural income disparity in Inner Mongolia through the use of time series and cross-section data, which shows that: the urban-rural income disparity presents U changing trend with economic growth in Inner Mongolia from 1978 to 2007, which is associated with economic development in Inner Mongolia and national economic system; the urban-rural income disparity of 94 counties in Inner Mongolia in 2007 presents U changing trend also with sequence of economic growth from low to high. The results can't support "Inverted-U hypothesis".The paper analyzes the inter-relationship between economic growth and urban-rural income disparity in Inner Mongolia from 1978 to 2007 through the cointegration test, error correction model and Granger causal test. The result shows that: there is a steady long-term relationship between urban-rural income disparity and economic growth in Inner Mongolia; urban- rural income disparity has enlarged with economic growth. Economic growth leads to urban-rural income disparity, and it is a one-way causality.Through the analysis of reasons of urban-rural income disparity enlargement in Inner Mongolia, this paper shows that: urban-rural income disparity in Inner Mongolia has been enlarging with the improvement of industrialization and urbanization, while reducing with improvement of agricultural expenditure proportion.