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The Effect of Rural Financial Development on Rural Economy and Farmers' Income——Analysis Basing on VEC model

Yanjun Mao

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Abstract

Based on quarterly data in 2001-2009,this paper empirically analyses the effect of China's rural financial development on economic growth in rural areas and increase of farmers' income by constructing a vector error correction model.The results show that the effect of China's rural financial development on increase of farmers' income is significant.There is a long-term equilibrium relationship between China's rural financial development,rural economic growth and increase of farmers' income.

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What this paper is about

Based on quarterly data in 2001-2009,this paper empirically analyses the effect of China's rural financial development on economic growth in rural areas and increase of farmers' income by constructing a vector error correction model.The results show that the effect of China's rural financial development on increase of farmers' income is significant.There is a long-term equilibrium relationship between China's rural financial development,rural economic growth and increase of farmers' income.

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Available abstract

Based on quarterly data in 2001-2009,this paper empirically analyses the effect of China's rural financial development on economic growth in rural areas and increase of farmers' income by constructing a vector error correction model.The results show that the effect of China's rural financial development on increase of farmers' income is significant.There is a long-term equilibrium relationship between China's rural financial development,rural economic growth and increase of farmers' income.

Key concepts: China, Error correction model, Economics, Rural economy, Rural development, Rural economics, Rural area, Economic growth

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