Analysis of The Impact Between the Income Distribution Gap and Economic Growth Based on Individual Fixed Effect Variable Intercept Models

To explore the interaction between the income distribution gap and economic growth, the difference between per capita disposable income and per capita GDP of urban and rural residents in 31 provinces and cities in China from 2013 to 2019 is selected as the data. Through the unit root test and cointegration test, the type of model is distinguished. Finally, an individual fixed effect variable intercept model was established to analyze the influence direction and trend between the two variables. The results show a positive interaction between the income distribution gap and economic growth. That is, the income distribution gap will promote economic growth. Similarly, economic growth will also expand the income distribution gap. Although the impact trend of the two is the same between different provinces and cities, there are significant differences in the intercept term of with individuals, indicating that the economic development differences between different regions may impact the relationship between the two. The research results can provide a reference basis for regional economic development and reducing the income gap.