Study On The Influence Of Monetary Policy Implementation On The Urban-Rural Income Gap In China

China’s economy has seen a tremendous surge in growth since its inception and reform,and it has become one of the nation’s foremost industrial forces.The 14 th Five-Year Plan presents new requirements for high-quality economic development and the promotion of social equity.While maintaining economic development,we should make greater efforts to ensure that the fruits of development will benefit more people fairly,reduce the income gap,promote equitable income distribution,and achieve common prosperity.Monetary policy is an important macroeconomic tool,which exerts significant influence in income distribution and the macro-economy.This policy brief examines how quantitative easing impacts income distribution and aims to understand how it does so through the lever mechanism between residents of urban and rural areas.This study has broad implications and is relevant from both an intellectual and empirical standpoint.Using "monetary policy-transmission channel-urban and rural income gap" as the analysis’ s logical framework,this article primarily examines how China’s monetary policy influences the economic inequality between urban and rural areas.The impact of monetary policy on the income gap among urban and rural areas and the related transmission mechanism are combined and presented in theoretical analysis based on recent research findings from domestic as well as global researchers.In light of this,this paper conducts a theoretical of the theoretical impacts of money supply here on urban and rural income gap,with a focus on transmission channels such as asset pricing policy instruments,channels for the transmission of credit,etc industrial structure.The transmission channel impact is also quantitatively examined in the article.A VAR model,constructed on the foundation of theoretical research,is employed for empirical examination to analyze the influence of monetary policy on the disparity in income between city and country inhabitants.These results imply that monetary policy making is positively correlated with the urban-rural income gap,indicating that an expansion of monetary policy will widen the income gap.The widening of the disparity between urban and rural income distributions in China is due to monetary policy,which influences asset prices,credit scales,and industrial structure.These three transmission pathways will further exacerbate the disparity.This is consistent with the results of theoretical analysis.Secondly,using panel data from several Chinese provinces,a mediation effect model is built,which investigates how regional variability in monetary policy affects the urban-rural income differential through the transmission channel.According to the findings,the three conduction pathways’ effects did vary depending on the area.The objective of diminishing the gap between urban and rural national revenue and attaining the distribution of income is to be achieved.excellence,the following rational and scientific policy proposals are made:(1)strengthening the stability of asset prices and asset price transmission mechanisms;(2)improving the credit market,strengthening credit system construction and credit transmission mechanisms;(3)promoting optimization,upgrading,and smoothing the transmission mechanism of industrial structure to narrow the income gap and improve income distribution.