A Dynamic analysis on Economic Growth and Income Distribution Inequality in China

摘要

This paper makes a dynamic analysis on the economic growth and the income distribution inequality in China. First, it studies the Cointegration relationship between the per capita GDP and the Gini Coefficient in China, and concludes that there is a stable long-term relationship between the economic growth and the income distribution inequality. The per capita GDP reverses this relationship, and Gini Coefficient promotes it. Second, by using a Granger Causal Model, this paper points out that the economic growth of China has directly led to the expanding of income distribution inequality, and the expanding of income distribution inequality has also affected the economic growth since 1978. In the end, by using a impulse response analysis, this paper finds that the economic growth and the income distribution of China will develop more and more healthy and harmoniously.