Empirical analysis of influence on economic growth of China by income distribution difference

Abstract

Based on a theoretic hypothesis that income inequality has both positive and negative effect on economic growth, this paper analyzes the influence of income distribution differences on economic growth of China by establishing a multivariate linear regression model. The influence of income distribution difference on the economic growth of China changes with the change of time. During a short period immediately after China implemented reform and opening up policy, income inequality has a positive influence on the economic growth of China. However, along with the passing of time, such positive influence has become weaker and weaker and even convertes into negative effective. This paper proposes several advices with policy to restrain the difference of income distribution from expanding and weaken its negative effect on economic growth of China.

Keywords

income distribution difference / positive effect / negative effect

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