Research Of Financial Policies On Narrowing The Income Gap Between Urban And Rural

In the critical period of economic transition,China is faced with a variety of development issues,such as inefficient economic structure and serious excessive capacity in some industries and so on.In order to make economy grow and develop sustainably,soundly and rapidly,we need to properly comprehend the relationship between monetary policy and economic development,establish a modern financial system which could foster steady economic growth,and make full use of the leading role of monetary policy in financial markets.At present,financing has remained to be too hard and too expensive for the masses,which in recent years has become an obstacle of China's economic development and transition.The demand to narrow the income gap through innovation of financial system has become increasingly urgent.In the overall design plan of the integration of Beijing-Tianj in-Hebei Region spearheaded by the central government,the development of innovation in financial system and mechanisms has been placed with more expectations.Roles of financial institutional innovation,financial policy development and distribution of financial resources in the transition are even more impressive.It is in the background of new political and economic normality that this paper chose "Research on Financial Policy of Narrowing the Income Gap between Urban and Rural Areas" as its topic.This paper is tries to clarify the mechanism in the impacts of monetary policy on urban and rural income gap issues.Horizontally,this paper summarizes the pros and cons of relevant experience of developed countries and regions.Vertically,this paper draws from China's three thousand years of governance thinking and the essence of financial development.Combined with the conditions of China at this stage,through qualitative analysis and quantitative research,the paper proposes practical suggestions that we should promote financial institutional innovation to solve the urban and rural economic problems.The first chapter comprehensively discusses existing domestic and foreign research results and literatures and focuses on the theory and practice of China's monetary policy managing urban-rural income gap since the Reform and Opening-up.The second chapter briefly reviews the conditions of income gap between urban and rural areas in China and the practicing effect of financial policy and then gives a brief overview of relevant supporting theories such as financial development theory,the theory of financial exclusion and inclusive finance theory.The third chapter systematically analyzes financial factors in the formation of financial policy and income gap and under the dual economic structure discusses the relevance,relationship and role between financial policies and urban-rural income gap in the areas of economic management.This paper then respectively introduces the relationship between savings rate,credit constraints,the financial crisis,urban and rural industry gathering and urban-rural income gap and gives a preliminary analysis of the relevance of monetary policy and the income gap between urban and rural areas.On the basis of these studies,the fourth chapter focuses on the analysis and argumentation of the operational mechanism of the interaction between monetary policy and urban-rural income gap.This chapter specifically studies discusses former experiences of integration of monetary policy,fiscal policy and industrial policy in China and analyzes relations and roles between urban-rural income gap and four aspects that are high household savings rate,capital market reform,optimization of investment structure and reform of tax system.Finally,this chapter comes to conclude the operating mechanism of monetary policy's impact on urban-rural income.With experiences and lessons of how foreign financial systems manage urban and rural income gap,Chapter V summarizes the best practices of major OECD countries.For example,by listing the cases of failures of Latin American countries,the paper discusses the role and results of these countries' financial policies managing urban-rural income gap in reality.Then the fifth chapter gives an empirical analysis of the use of financial policy in China and urban-rural income gap.In response to the above information,the sixth chapter is to make specific policy recommendations on how to resolve the problem of income gap in urban and rural areas.It will be divided into four areas to discuss the future direction of policy respectively from the view of the central government level,the local level,financial institutions and the optimization of external policy environment.Finally,Chapter VII summarizes the whole context and draws main conclusions.This paper conducts a theoretical and empirical research on the intrinsic link between monetary policy and urban-rural income gap.The balance between efficiency,income gap and equity determines the breadth and depth of the narrowing of urban-rural income gap and the sustainable development of urban and rural areas in the process of financial policy formulation and implementation.Based on theoretical study and relevant academic achievements,this paper builds the theoretical framework of financial policy and narrowing the urban and rural income gap;by combing historical analysis and econometric method,this paper empirically analyzes the impact performance of financial policy and coordinated development on urban and rural areas;by using analytical tools of economics,this paper shows the mechanism of monetary policy restricting coordinated development of urban and rural areas and designs the mechanism and pattern of monetary policy promoting urban and rural sustainable development.The main conclusions are as follows:1.The realization of a coordinated development of urban and rural areas in China is the long-term goal of economic and social modernization and narrowing the income gap between urban and rural areas is under realistic conditions and constraints of the stage of modern development between urban and rural areas.The urban and rural differences in all aspects of economic and social development exhibit the multi-stage dynamic interdependent state and diverse dynamic process of adaptation.At a certain stage of development,non-balanced urban and rural development is the normal state.And this is precisely a dynamic optimal path to achieve the final goal of balanced urban and rural development.2.Coordinated development of urban and rural areas in China conforms to a two-stage model based on dynamic efficiency and intertemporal equity.In the first stage agriculture feeds industry and rural supports cities.During the second phase industry nurtures agriculture back and cities support the countryside.There is historical necessity and rationality for the path choice.As a developing country,we could not interpret terms of fairness from the current period or in a stationary way.Instead,we should understand it from a dynamically optimized and intertemporal perspective.Pursuit of fairness immediacy may actually cause the development plight in urban and rural areas which would be the greatest injustice that with which neither city or rural would prosper.Fairness on the dynamic optimal path is intertemporal,which means at first rural supports city and then city leads rural and ultimately both urban and rural areas achieve common prosperity.3.Since the establishment of New China,China has passed the first stage of a two-stage model of coordinated urban-rural development in which rural mainly supported city so as to form the "dual" structure of urban and rural development.It was this "dual"structure that created "Chinese miracle" in the economic development history.However,now China has historically entered into the second phase in which city leads rural and industry nurtures agriculture.The target of this stage is to gradually narrow the gap between urban and rural areas and to realize the coordinated development of them.4.Currently we should adhere to the direction of monetary policy in which cities support rural areas and industry feeds agriculture back.The implementation of these financial policies should be based on market mechanisms and supplemented by administrative means.5.The main reason why monetary policy will lead to the expansion of urban and rural economic and social development gap is the contraction and expansion mechanism of financial policy,interest rate policy and monetary policy that have a tendency of urbanization.6.Empirical studies have shown that the design and implementation of financial policies to promote the coordinated development of urban and rural areas must be based on market mechanisms.Overall,in China's existing financial and monetary system,the partial effect of monetary policy on tax policy has a significant "bonus effect." So,expansionary monetary policy will enhance the effects of tax curbing on widening income gap.Obviously,an important thing is that a coordinated development of urban and rural areas in China is the outlook for the real long-term goal of economic and social modernization.Under realistic conditions and constraints of the stage of modern development between urban and rural areas,the urban and rural differences in all aspects of economic and social development exhibit the multi-stage dynamic interdependent state and diverse dynamic process of adaptation.At a certain stage of development,unsustainable urban and rural development is the normal state.And this is precisely a dynamic optimal path to achieve the final goal of balanced urban and rural development;monetary policy and harmonious development of urban and rural areas are inseparable.The implementation of monetary policy needs to take efficiency as well as equity into account and fiscal and monetary policy and industrial policy should be effectively coordinated in order to efficiently promote urban and rural economic and social development.In the case at this stage,the implementation inclined to agriculture,rural Financial Policy is necessary and feasible,but we must pay attention to the inclination and the effectiveness of policies to prevent unnecessary deviations which could lead to invalid configuration and waste of resources;there is underlying worry behind China's rapid economic development and prosperity and expansion of city.The economic growth depending on investment and export for a long time is fragile.Efforts to develop agriculture,rural economy,non-public economy and small and medium-sized enterprises economy as well as narrowing the development gap between urban and rural areas are important goals of coordination of financial and industry policy.From the history,we can know that the goal of coordinated development of urban and rural areas will not be achieved overnight.In the future,need to continue to explore industrial policy,fiscal policy and financial policy in depth on how to maximize the effect of narrowing the urban and rural income gap and study on mechanisms of operational coordination between harmonious urban-rural development and sound fiscal and monetary policies that have positive impact on the former.It is necessary to study implementation mode of how Financial Policy effectively promote the coordinated development of urban and rural areas,which include the following four modes:efficient government management mode,effective market operation mode,organic industries coordination mode and sustainable business development mode.These models must be based on effective market mechanism,integrated market structure and open market system;it is necessary to construction scientific and rational integrated coordination mechanisms and operation system of financial policy,fiscalpolicy and industrial policy which to improve industry nurturing agriculture;it is necessary to construction scientific and rational integrated coordination mechanisms and operation system of financial policy,fiscalpolicy and industrial policy which to effectively promote the city leading rural.Studying the mechanism of monetary policy to reduce the urban-rural income inequality is conducive to the development of finance to improve income distribution and to have a correct understanding of effect of financial development and financial regulatory policy on China's economic stability,economic growth,income distribution and sustainable development of China's economy.At the beginning,this study focuses on the pioneering of the research and the possibility of results applied to reality.According to the analysis of operating mechanism of monetary policy adjusting overall economic operation and income distribution,this paper deduces mathematical relationship,logical relationship and causal relationship between them so as to innovate and rich domestic relevant research results and to provide policy recommendations on financial reform in the future,balancing urban and rural areas and narrowing urban-rural income gap.