Abstract:Based on the data of 1998-2017 in Linxia Prefecture, Gansu Province, a typical poverty-stricken area, a vector autoregressive model was established in the paper. On the basis of examining the co-integration relationship between economic growth and income gap between urban and rural residents, the dynamic relationship between them was analyzed by impulse response analysis and variance decomposition. The results showed that there was a balanced relationship between economic growth and income gap between urban and rural residents. The impulse response of the two groups of variables was positive, indicated that there was a positive driving effect between them.From the results of variance analysis, the contribution rate of economic growth to the change of income gap between urban and rural residents was rising steadily, but the increase rate continued to slow down; in the fluctuation of economic growth, the contribution rate of income gap between urban and rural residents was more prominent, and gradually increased with the passage of time. Therefore, we should vigorously promote the leap-forward development of regional economy, get rid of the existing path dependence, stimulate endogenous growth momentum, and effectively control the income gap between urban and rural residents in the deep poverty-stricken areas.