The Co-integration Analysis Based on the Income and Consumption of Urban Residents in Shandong

Using co-integration theory,the per capita annual disposable income of Shandong urban residents and per capita living expenditures for consumption has carried on demonstration analysis.The conclusion that is reached: from year 1980 to 2003,the income and the expenditures of urban residents have co-integration relation,the consumption function of urban residents has the stability,the consumption of residents depends on the income of residents mainly.Since in the long run,to stimulate Shandong urban consumption market,must rely on increasing the per capita annual disposable income of urban residents.For stimulating the expense to reduce interest rate and the policies of short period such as consumption credit,although in the short run,it possibly expands consumption,but is impossible to affect the expense disbursement and long-term balanced relations of the income,the expense that expanded last issue will carry on the revision in the next issue of expense.