Dynamic Quantitative Analysis of Correlation Between the Development of Infrastructure Construction in Chinese Rural Areas and Peasants’ Income Growth.docVIP

Dynamic Quantitative Analysis of Correlation Between the Development of Infrastructure Construction in Chinese Rural Areas and Peasants’ Income Growth 1. LIU Lun-wu 2. XIAO Long Jiangxi University of Finance and Economics, Nanchang, P.R.China, 330013 Abstract Based on vector auto-regression model, by applying impulse response function and prediction variance decomposition, this paper describes the dynamic correlation between the development of infrastructure construction in Chinese rural areas and the growth of peasants’ income. The research shows that there is long-term forward correlation between development infrastructure construction in Chinese rural areas and the growth of peasants’ income, however, the influence tends to be weak. Therefore, currently, we should increase investment in infrastructure construction in rural areas and regard the development of infrastructure construction in rural areas as the important basis for the sustainable growth of peasants’ income, but not the main ways of enhancing peasants’ income. Thus, government should adopt long-term investment policy to develop rural infrastructure construction so as to provide conditions for the sustainable growth of peasants’ income. Key words Investment in Rural Infrastructure Construction, Peasants’ Income Growth, Vector Auto-regression, Impulse Responsive Function, Variance Decomposition 1 Introduction The problem of increasing peasant’s income has become a core issue with development of Chinese economics and society, which is most outstanding, most attentive and highly regarded by the government. How to increase peasant’s income? Many beneficial and comparative profound researches have been done and lots of new ideas and measures have been put forward by domestic scholars. The main points can be summarized as follows: peasants’ interest protection theory, urban and rural harmonious development theory, industrial structure adjustment theory, theory of employment priority of rural labor forc