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An Empirical Analysis on the Impact from the Income Change of Urban and Rural Residents to Economic Growth

WANG Jun-qiang,YU Yi,ZUO Ting(College of Humanities and Development,China Agricultural University,Beijing 100193,China)  
Based on economic data from 1985 to 2010,by using co-integration theory,error correction model and Granger causality test,the article does an empirical analysis of the interaction between urban and rural residents' income and economic growth.Studies have shown that there is a long-term stability and two-way causal relationship between the rural residents' income and economic growth,while only one-way causal relationship between the urban residents' income and rural residents' income growth in promoting economic growth is stronger than that of urban residents' income growth;In short-term,the rural residents' income growth experienced a process of first hindering and then promoting economic growth,however,the urban residents' income growth continue to promote economic growth,but the role begins gradually declining.Finally,the article drew a conclusion that the government must also take into account the growth of the income of urban residents while increasing the income of rural residents.
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