The Effects Of Financial Development On Income Distribution Between Urban And Rural Areas Of China Based On VAR Model

Since the reform and open policy,China's financial market has been developing rapidly,the scale of finance has increased exponentially,and the financial efficiency has been greatly improved.Finance plays an increasingly important role in promoting economic growth.But at the same time,the gap between the rich and the poor is increasing,and the imbalance of income distribution has also aroused widespread concern.A lot of researches have confirmed that financial development has a great effect on the distribution of income.If so,what is the effect of financial development on the distribution of income?Will the distribution of income affect financial development,too?These are obviously the major problems we are facing at the moment.The first part is the introduction section.It mainly to regulate the basic concept,and further the explanation of existing related concepts.The second part discusses the historical research of the relationship between financial development and income distribution.This article expounds the theory of the reverse "U" relationship between financial development and income distribution.The third part establishes models,analyzing the transmission mechanism of the income distribution effect to financial development.These include the mechanism of the effect of financial development to economic growth,threshold mechanism and non-equilibrium mechanism.The fourth part presents the history development and current situation of China's finance market.The fifth part is empirical analysis.Through the cointegration equation,we analyze the long-term relationship between the factors.Based on the impulse response function,we analysze the short-term fluctuations of financial development to the income distribution.Baed on the variance decomposition,quantify the influence of financial development on the income distribution.The last part of this paper is give the author's policy recommendations about how keep the speed of our economic growth and reduce the income gap at the same time.