An Empirical Study On The Effect Of Macroeconomic Volatility On The Income Inequality In China

Macroeconomic volatility and income distribution are two important issues in economics.In recent years,more and more scholars have begun to study the relationship between macroeconomic fluctuations and income inequality,and get different conclusions.However,there are few studies on the influence of economic fluctuation on the income gap of residents in China.At present,China's economy is running smoothly,but the macroeconomic fluctuations always exist.And the income gap between residents continues to expand.The government has put forward a series of policies to support the poor,and narrowing the income gap is an urgent problem to be solved in our country.In this context,this paper attempts to provide a reference for the government decision-making.The purpose of this paper is to explore the impact of macroeconomic fluctuations on the income gap of residents,and to find possible mitigating factors.This paper at first briefly introduces the related theories and the research results about the influence of macroeconomic fluctuation on income gap.Second,it discusses the measure index and the method of the macro economic fluctuation and the income gap of residents.Third,it comes to give statistical description of the variables by using panel data from 2001 to 2014 in China and other regions,it describes the tendency of macroeconomic fluctuation and resident income gap in a comprehensive way.Then,the fixed panel effect is used to verify the influence of macroeconomic fluctuation on the income gap between different residents as well as the role of economic fluctuations in different directions.The effects of macroeconomic fluctuations on income distribution in eastern regions and midwest regions are compared.Finally,the long-term effect of macroeconomic fluctuation on the income distribution is discussed by using PMG estimation method.The results show that: The impact of macroeconomic fluctuations in different stages of the cycle on the income gap of residents at different levels is asymmetric,and there are obvious regional differences in the eastern and Western regions.In particular,in this paper,the study found that in the long run,in the boom of macroeconomic fluctuations in the eastern region at all levels of residents' income inequality has a significant impact,while the recessionary macroeconomic fluctuations in the midwest the income gap between rural and urban areas have significant long-term effects.Therefore,according to the empirical study conclusion,this paper argues that in the boom,the government should focus on preventing further east income gap of residents in different levels,and during the recession,the government should pay special attention to prevent the expansion of income gap between urban and rural residents in the midwest.In addition,empirical research of this paper is to verify the income distribution of the existence of kuznets curve,and found that the fiscal expenditure and human capital will play a role in narrowing income gap,whileinflation will deteriorate the residents income inequality.