Empirical Research On Relationship Between Financial Development And The Urban And Rural Residents’ Income Gap In Chongqing

Benefiting from China’s reform and opening up, Since Chongqing became a municipality,the Economy has enjoied a sustained and rapid growth. but we also find that the income gap between urban and rural areas is expanding fast. economic data shows that, in 2013, per Capital Disposable Income of Urban Households is 25216.13 yuan, per Capital Annual Income of Rural Households is 8331.97 yuan. The former is 3.03 times the latter. the continuing expanding between urban and rural income gap will induce many unstable factors in society. so improving social phenomenon of income inequality is particularly urgent, Chongqing as a municipality is full of demonstration effect. requirements to change this situation is pressing.Based on Chongqing, this paper is working to find the relationship between urban and rural income gap and financial development by combining theory and empirical methods. we also put forward some recommendations to narrow the urban and rural income gap from the perspective of financial development. the main research ideas includes: First, this paper has elaborated the Theory of Financial Development and Income Gap Theory. we divide the theoretical and empirical study in relationship between financial development and the income gap between urban and rural areas in three parts: financial development expands the income gap between urban and rural areas; financial development narrowes the income gap between urban and rural areas; financial development and the income gap between urban and rural areas shows the relationgship of inverted "U" shape. mechanism of financial development on the income gap between urban and rural areas is also mentioned in this paper. and then,we expounds current status of financial development, current status of income gap between urban and rural areas by pictures and tables. based on this, we describe and analyze the relationship between financial development and the income gap between urban and rural areas in Chongqing.we find that government guiding the inequitable distribution of financial resources has resulted in the expanding income gap between urban and rural areas. according to the data of Chongqing province from 1985 to 2013,the paper empirically analyses the relationship between financial development and urban-rural income gap in Chongqing province by using unit root test,cointegration tests and error correction model. research conclusion shows that there is a positive correlation between financial development scale and urban-rural income gap while there is a negative correlation between financial development efficiency and urban-rural income gap.finally, based on the conclusion of empirical analysis and the questions of descriptive analysis, this paper puts forward some suggestions on how to narrow income gap between urban and rural areas、how to Promote the financial development in rural areas and how to Increase farmers’ Income.