The Relationship Between Financial Development And Urban-rural Income Gap

From the perspective of financial intermediaries and capital markets,this paper discusses the relationship between financial development and income of urban and rural residents.Firstly,the paper summarizes the literature review,and thendescribes the current financial development from two aspects of financial intermediation and capital market.Secondly,it expounds the current situation of income gap between urban and rural residents in China,and highlights the imbalance between urban and rural economic development.Thirdly,it analyzes the mechanism of financial development on the formation of income gap between urban and rural areas from two aspects in directly and indirectly ways.In the empirical analysis,this paper uses the time series data model to do empirical analysis on the gap between China's financial development and the urban-rural income gap,beside this,it divides the variables into three groups to make a comparative empirical analysis.The expansion of financial intermediaries will widen the income gap,but through economic growth,the expansion of the income gap between urban and rural residents will promote the development of financial intermediaries.The influence of the stock market development and the urban-rural income gap is not remarkable,the main reason is that the development of the stock market is still not mature,and the efficiency of the capital allocation of the stock market needs a further improving.The development of financial intermediaries has a great effect on the development of the stock market,the circulation rate of the stock market and the circulation rate of the bond market,but the effect of the stock market on the development of financial intermediaries is not obvious,which is mainly due to the extremely serious financial restraining in China.After empirical analysis,the paper analyzes the causes of the empirical results.Finally,from the perspective of financial intermediaries and capital markets,this paper provides relevant policy proposal for improving the stock market and shrinking the income gap between urban and rural areas.