The Income Gap Between Urban And Rural Areas, The Income Gap Between Workers And Farmers, And Economic Development

The industrial-rural income gap and the urban-rural income Gap is closely related to economic growth,however,the essential requirement of economic development is the coordinated development of agriculture,industry and cities.In this paper the Theil index of the urban-rural and the Theil index of the industry-agriculture measure the income gap,and the urban-rural income gap is measured by the Theil index of the urban-rural;The industrial-rural income gap is measured by the Theil index of the industry-agriculture.the deviation coefficient indicating the degree of coordination measures the relationship between urbanization rate and industrialization rate.This paper uses the economic growth model of endogenous agricultural technology advancement based on the dual economic structure,and uses the OLS,the cointegration test,the error correction model,the Granger causality test,and the threshold regression model to study the relationship and the threshold effect of the Theil index of the industry-agriculture,the Theil index of the urban-rural and the deviation coefficient.This paper also study the relationship and the threshold effect of the Theil index of the industry-agriculture,the Theil index of the urban-rural and the deviation coefficient and the GDP.The results of this paper: First,the urbanization and industrialization can contribute to the economic growth and the economic development.This paper found that there is an inverted U-shaped relationship between the GDP and the deviation coefficient.The error correction model shows that when the economy deviates from the long-term equilibrium,the error correction will adjust the amplitude by 2.06% in the reverse direction.The impact coefficient of the deviation coefficient and its square to the previous period GDP is 4.1158and-6.7136,respectively.According to the relationship between them and the extreme value analysis,we can find that the ratio between the optimal the coordination of the urbanization rate and the industrialization rate is 0.7237.Second,there is a negative correlation between the urban-rural income gap and the deviation coefficient.there is also a negative correlation between the industrial-rural income gap and the deviation coefficient.Third,without precluding any data and with a variety of methods,this paper found an inverted U-shaped relationship between the Theil index of the urban-rural and the GDP;the relationship between the Theil index of the industry-agriculture and GDP is controversial.