The Relationship Between Rural Financial Development And Rural Economic Growth

Chongqing as China’s youngest municipality directly under the centralgovernment， The rural population accounts for considerable， Stable and rapideconomic development in rural areas is vital to the economy of Chongqing City。In thedevelopment of rural economy, rural finance is very large, the supporting role but, dueto the large commercial banks have withdrawn, combined with characteristics ofcooperative financial institutions deposit only loan, rural loans difficult problem hasnot been effectively resolved, the new type of rural financial institutions emerge as thetimes require, thus greatly ease the rural loan the difficult problem. After six years ofdevelopment, how to verify whether the new type of rural financial institutions topromote rural economy, how to further the development of new rural financialinstitutions, it is to maintain the stable development of rural finance, the key topromote the rural economy.The rural classical theory as the starting point, through the analysis of currentsituation of development of new-type rural financial and Chongqing rural financialdevelopment and rural economy, get a preliminary conclusion. And based on theempirical study on Chongqing new rural financial development and rural growth usingeconometric method. The rural financial development indicators and rural fixed assetsinvestment indicators and indicators of economic growth variables are introduced intothe production function, in order to establish the empirical research model, and thenthe Johansen cointegration test for each variable through the unit root tests based on,then the model is Zou type test of the rural financial development index and ruraleconomic growth indicators, and use Granger causality test to verify the Chongqingrural financial development level on causality of economic growth.The empirical study shows, new rural financial institutions is indeed on the ruraleconomic growth play a long-term role in promoting, and between rural financialdevelopment and rural economic growth there is a long-term equilibrium relationshipbetween. The development of rural finance to promote rural economic growth, but thegrowth of rural economy did not effectively promote the development of rural finance, rural financial development lags behind the growth of the rural economy. Then,according to the results of empirical research, put forward the proposal from thecontinue to deepen the reform of rural financial institutions in Chongqing, Chongqing,and strengthen the supervision of financial institutions in rural areas continue toimprove the rural security mechanism and related policies.