The Intra-country's Financial Development And Urban-rural Income Gap In Zhejiang Province

After Goldsmith (1969), Mckinnon (1973), and Shaw (1973) have created the theory of financial development, the economists widely researched the relationship between financial development and economic growth. However, the economists began to research the topic of the relationship between financial development and income distribution until the1990s. As the core of modern economy, financial resources have important effects on economic growth and income distribution. In the process of the expansion of the urban-rural income gap, what kind of role does financial development play? In this context, the study of the relationship between the urban-rural income gap and financial development has important theoretical and practical significance. The county economy is an important part of the national economy and the county's economic development play an important role which cannot be underestimated in a region's economic development. However, in general, the county's economy is relatively more slow and worse than that of the city center. Of course there are a lot of factors, but financial development is one of the major elements. As a well-developed eastern coastal province, the level of financial development and income of Zhejiang province were in the forefront of the country, the research of the relationship between financial development and the urban-rural income gap of Zhejiang Province has important implications not only to narrow the income gap between urban and rural areas in Zhejiang Province, but also to instruct the relatively backward central and western regions with a strong reference. Based on the statistics data of Zhejiang Province, this paper studies the relationship between financial development and the urban-rural income gap.From four areas, this paper uses empirical and normative methods to study the relationship between financial development and the urban-rural income gap in Zhejiang province:First, a literature review; Second, the mechanism analysis; Third, the current situation analysis; Four, empirical test. Four aspects link each other closely to form the overall content of this article. First of all, respectively from three aspects of financial development, income distribution, and the relationship between financial development and income distribution, this paper recognizes the literature and,based on that, analyzes the impact mechanism and way of the urban-rural income gap and financial development mechanism. Then, this article uses the statistical data of Zhejiang Province to describe the relationship between the urban-rural income gap and financial development and analyze its characteristics and the reason. Finally, this paper selects the financial development indicators and uses of the statistics data to empirically test the relationship between the urban-rural income gap and financial development.Finally, based on the empirical conclusions, this paper analyzes the causes of the relationship between financial development and the urban-rural income gap. In addition, according to the actual situation of Zhejiang Province, this paper submits the policy recommendations on how to deepen financial reform, promote financial market development and narrow the urban-rural income gap.