Trade Openness, Income Inequality and Economic Growth: An Empirical Study Based on China’s Inter-provincial Panel Co-integration

This paper is a study of the relationship between trade openness,income inequality and economic growth with the method of panel co-integration.The results show that when the degree of income inequality is low,trade openness will be favorable to economic growth;while if the degree of income inequality is high,trade openness will be unfavorable to economic growth.Because of the currently high degree of income inequality in China,trade openness will hinder the economic growth.So it indicates that on the one hand the governments at every level should be cautious in implementing the trade openness policy,and on the other hand,narrowing the income gap has become a top priority.