The Empirical Research Of Jiangsu Rural Financial Development And Unban-Rural Income Gap

After the reform and opening up, Jiangsu’s economy has made rapid development, living standards have greatly improved. But-along with economic development, urban-rural income gap is gradually widening. The expansion of the urban-rural income gap means that the injustice of the income distribution is an urgent problem for the government and society. There are many factors affecting the income gap between urban and rural areas, financial development in rural areas is one of the more important ones. Studying the relationship between Jiangsu Rural Financial Development and the urban-rural income gap, exploring its mechanism have important practical significance.Firstly the paper explains the meaning and background, research methods and possible innovations. Then on the basis of a comprehensive review of the theory of financial development and urban-rural income gap between theory, the paper studies the development of rural financial mechanism, the impact on the urban-rural income gap and Jiangsu Province Rural Financial Development and describes the urban-rural income gap between the current situation, and points out that the effectiveness and inadequate of rural finance development. Furthermore, based on actual data, this paper establishes a VAR model, an empirical study on the relationship of Jiangsu Rural Financial Development and the urban-rural income gap. The empirical results show that:the expansion of rural financial development, will further increase the income gap between urban and rural areas; the efficiency of rural financial development, it will narrow the income gap between urban and rural areas. Finally, the paper studies the empirical results, and gives policy recommendations to narrow the urban-rural income gap, including the guide commercial credit, prevent the loss of financial resources in rural areas, improve rural financial ecological environment, promote competition in rural financial market, the development of large-scate operations, improves rural human capital.