Financial Development And Income Disparity Of Urban And Rural

With the rapid development of national economy, the income disparity between city and country is enlarging, especially under the reform and opening-up policy.According to domestic and foreign scholars’ finds, the unbalance of financial development will lead to income disparity. Considering the urban-rural dual structure of China, it will cause a continued expansion of income gap between urban and rural areas,which will brings a huge side effect to our economy, even a series of social problems.Therefore, this paper believes it’s of great significance that studying the relationship of income disparity and financial development during the balancing urban and rural policy taking actions.Firstly, the paper induced the theories of financial development and theories of income distribution, and separated them by different opinions and reasons. Through making conclusions of related studies, it was confirmed that the study thought, objective and innovation points of this articles.Then, this paper did rigorous scientific experiments about the relationship of financial development and income disparity between city and country by the improved two-sector model and system GMM based on the sample of Chongqing. The experiment showed that financial development expands the income disparity indeed.As the result doesn’t match our current macroeconomic policy, this paper still searched the way of coexistence between them. In chapter 4, this paper compared the status of implement of Chongqing with Zhejiang which is relatively more developed in finance through DID method. There is evidence that during the process of balancing urban and rural development, urban-rural dual structure is gradually broken, and the financial development has turned into decline the income disparity between city and country finally.At last, on the basis of the previous regression results in chapter 3 and 4,the paper made a full range of advice for realizing common prosperity in Chongqing areas.There are three aspects of value-added contributions of this paper. The first one is that improved and innovated two-sector model, and made an empirical analysis by it.The analysis’ s result showed that due to Chongqing’s financial development focus on city and industry in a long-term, the unbalance of development between city and country is very significant, which contributes to the expansion of income disparity.The second one is detailed evaluation of poverty elimination effect made by balancing urban and rural policy, considering the policy makes a huge contribution to local rural finance and financial communal facilities. The evaluation showed that with the implementation of policy, the financial development is minimizing local income disparity, and find a way of coexistence for both financial development and the common prosperity of urban and rural areas.The third one is built a comprehensive model which not only contained financial development factor but also other controlled variables such as transportation and export and finally offered an all-aspect suggestion about the implementation of poverty elimination policy.