Economic Financialization And Income Inequality

Income inequality has always been an important social problem faced by all countries in the world.In international business activities,it is also related to the advantages and disadvantages of each country’s business environment.With China’s economy achieving leapfrog development and entering a new era of socialist modernization construction,while gradually improving people’s living standards and happiness,attention should be paid to the continuous decline in the proportion of residents’ labor income relative to property income,which has become one of the reasons for the widening wealth gap.The long-term problem of income inequality will pose a threat to sustained economic development and social stability.As an important regulatory mechanism and component of the national economy,finance has played an important role in the economic field at all levels of the country.We must recognize that one of the core functions of finance is resource allocation,which determines its obvious role in income distribution regulation.In China,the real estate industry is not only closely related to the financial industry,but also to people’s lives.Therefore,the relationship between income inequality and financialization can be further analyzed from the perspective of real estate,so as to provide reference for improving the financial market and alleviating income inequality.Based on previous research and literature,this article systematically expounds on the concepts and measurement methods of financialization and inequality,and analyzes the relationship and impact mechanism between the two.Combining with China’s national conditions that are closely related to the real estate and financial industries and residents’ income,this article proposes a model and hypothesis,selects panel data from 31 provinces in China and 40 first-,second-,and third-tier cities between 2005 and 2020,and uses real estate investment as the threshold variable of the model.The article uses a threshold regression model to analyze and explain the relationship between China’s economic financialization and income inequality.The study found that China’s financialization development will exacerbate income inequality,and the two exhibit a nonlinear relationship.The same trend also exists from the urban dimension,but the impact effects of different cities are different.This article proposes corresponding policy recommendations based on the above.