The Empirical Analysis Of Relationship Between The Financial Development And The Increasing Of Rural Income

China is a large agricultural country, the number of the rural population more than half of the population of the country. the income of farmers is related to social stability, national security. The development of the economy is to improve the living'index, the increasing of the farmers'income will not only stimulate the consumption, but also improving the quality of the farmers'life. The increasing of the consumption can also promote economic growth in rural areas in turn. Increasing the farmers'income meets the requirements of building a harmonious society in China, and also responds to the call of the times. However, further development of the rural economy needs the support of our financial system, The question is how to promote the rural development with financial development.Since 1978, the income of the farmers in China has increased year after year in a wave shape, but the gap of the incomes between the provinces is very large. From the collected data we find, the rural income of Beijing, Shanghai city is about three times than Gansu, Qingdao, Shanxi in 2009. And some provinces'rural income in central and western is growing very slow. That may be because these areas'financial development lags behind others'. And the financial development in urban is higher than the rural. This thesis is about an empirical study of financial development and peasants'income growth.At first this paper is a general introduction about the relationship between financial development and the income growth of farmers. There are three types: positive, negative and bi-directional Granger causation. The second is a description about the change of financial development and income growth of farmers. There are three parts to introduce the income growth of farmers: one is a review about the change of the income growth of farmers, another is a comparison among the provinces, the last is a structural analysis of income. The introduction of financial development is about the level of market development, institutional system, the change of property structural. The are also a brief description about the situation of rural financial development. And it points out the problems of financial development. The third is an empirical study. There are three types about the test: unit root test, co-integration test and Granger causality test. The results show that China's financial development contributes to the growth of farmers'income. Financial expenditure also promotes the growth of farmers'income. At last, there are some politics recommendations, including the agricultural insurance, micro-credit and the private security system. They will be discussed one by one.