The Research On The Influences Of Financial Development To Urban-rural Income Gap In Henan Province

Since the reform and opening-up policy set up, the economy in Henan province has been developed rapidly, and the quality of people’life has been promoted a lot. In2012, the per capita net income of Henan rural area is7525RMB, it is the72times as much as the1978.However, as the economy developing, the number is much lower than the urban’s living, and the gap is more and more larger than before.The paper is based on the financial development of rural area in Henan Province, male the outline between it and the Urban-rural Income Gap Theory, and describe more about the current situation about them, furthermore, the paper would also point to the lack of rural financial development an the positive effect. According to the development data from1991to2011, the paper builds the VAR data model. After the empirical study on the link of rural finance development influencing on the urban-rural income gap in Henan, it conclude that there is a positive correlation between the development scale and the gap, and there is a negative correlation between rural finance development efficiency and the gap.At last, in order to shrink the gap, the paper make the suggestion from the financial development.Firstly, in the rural area, we should expedite the reform of monetary system, and standard rural financial institution; secondly, we should improve the financial environment, strengthen the public infrastructure construction and village banks; thirdly, we need increase financial support for agriculture and rural enterprises, and improve the rural social security system, in order to promote the rapid development and efficiency.