A Dynamic Econometric Analysis of Relationship between Urbanization and Income of Rural Residents in Hebei Province

It is of vital importance for a harmonious society to improve the income of residents, and it is the key of improving the farmers income that surplus rural labors are transmitted to cities through increasing the urbanization level. From the fact of Hebei province the relationship between urbanization development level and growth of residents' income is analyzed on the base of VAR modeling, and the results of model can be explained using the impulse response functions and decomposition of forecasting variance. At last, we can come to a conclusion that the urbanization and residents' income growth are effected positively with each other, and the responses are stronger as the term is longer. Therefore, we should take long-term polices to increase the rural income through improving the urbanization.