Abstract Based on Shaanxi time series data of 1978-2009， using Johansen co-integration test，vector error correction model and variance decomposition method respectively，the authors tested the long-term and short-term relationship between formal rural finance and economic development in Shaanxi province. The results show that formal rural finance promotes the development of rural economy in the short-time. According to the contribution rate，it is formal financial development, capital marginal productivity, efficiency of rural financial system and rural savings respectively. However the long-term relationships between the variables show that formal rural financial development level and efficiency inhibit rural economic growth.
2011, Vol. 28 
