Analysis Of Income Disparity And Economic Growth Literature Review And China's Urban-rural Income Gap Between The Empirical

Growth and distribution are two major factors in valuing the developing status of a country's economy.To understand the interworking and interacting relations between economic growth and income distribution is of profound meaning for a country's economy to develop.There is a large literature on the channel through which income differentials influence economic growth.Traditional theories addressed that income differentials promote economic growth.However,many empirical results show that countries with larger income differentials experience slower growth. Recently,much literature studied the trend and determinants of China's post-establishment income differentials,especially cross-regions income differentials as a result of economic growth in political perspectives including urbanization and industrialization.Researches on urban-rural income differentials are insufficient due to limitations of data and other aspects.This paper firstly reviewed the literature on the interactive mechanism between income differentials and economic growth as mentioned above and introduces separately the theoretical and empirical findings of influence of economic growth on income differentials and of economic growth's responding to income differentials. Secondly,it empirically studied the statistic relations between urban-rural income differentials and economic growth during the period of 1999 to 2007 in China and found that in a static perspective,the ratio of urban annual per capita income to rural annual per capita wage income and GDP forma U-shape,which means the wage ratio firstly decreases with and then increases with GDP;in a dynamic perspective,the differential between urban income's growth rate and rural total income's growth rate and GDP forms a U-shape,which means the income differential firstly decreases and then increases with the growth rate of GDP.