The Evolutive Law concerning Relationship between Economic Growth and Farmers’ Income Increase in Xinjiang since the Reform and Opening-up: An Empirical Analysis of the VEC Model

We select the per capita gross domestic product and rural residents' per capita net income in Xinjiang as the indicator variables to measure economic growth and farmers' income increase in Xinjiang, respectively. We establish the cointegration equation, the vector error correction (VEC) model, and use the impulse response function to conduct empirical analysis of the evolutive law concerning relationship between economic growth and farmers' income increase in Xinjiang during the period 1978-2010. The results show that there is a cointegration relationship between economic growth in Xinjiang and farmers' income increase; the former plays an important role in promoting the latter, following the evolutive law "first intensify, then abate, intensify again, and finally become stable". We put the following policy recommendations: providing preferential policies for farmers, scientifically and rationally guiding the transfer of rural labor; improving the function of agriculture, increasing the proportion of non-farm income; gradually bridging the widening income gap between urban and rural areas, coordinating urban and rural development.