Empirical Analysis on Long-term Balanced Relationship between Income and Consumption of Chinese Rural Residents

In order to clarify the long term and stable relationship between consumption and income,this paper,based on co-integration and error correction model,studied the stable relationship of income and consumption in a long term and the adjusted relationship of consumption and income in a short term for Chinese rural residents,and calculated the average consumption incline and the marginal consumption incline,then this paper introduced EG method to analyze the relationship between income and consumption.The result showed that income is not the main reason for income increase from the past till now,and this paper also found that there is a remarkable causal relationship between the increase value of income and the increase value of consumption,and the consumption obviously influences the income of rural residents.Therefore,some suggestions on how to maintain the sustainable increase of income of rural residents and how to promote the consumption are put forward in this paper.