A Study on Disequilibrium of China's Income Distribution Based on the Two-Gap Model Paradox

Since the year of 1994,the Two-Gap Model theory has incured a paradox in China,which has exerted influence on China's income distribution.The structural imbalance of high investment caused by saving overflow brought about a result that most wealth is absorbed by the state sector and monopolies.The distribution of national income is worsened because the government become richer while the people remaine the same.Although there's no foreign exchange gap in China,large amounts of foreign capital that is of inferior quality and regional disequilibrium was still introduced in.This did not dramatically improve national income level;on the contrary,it expanded income gap between regions,also between urban and rural areas.The precautionary motive and China's underdeveloped sawing ratio of the capital market restrained the increase of residents' property income.Residents can't fully share the fruits of China's economic growth,whose income growth was slower than GDP growth in many years.