INEQUALITY AND GROWTH: ANOTHER LOOK WITH A NEW MEASURE AND METHOD
Version of Record online: 20 JAN 2012
Copyright © 2012 John Wiley & Sons, Ltd.
Journal of International Development
Volume 25, Issue 1, pages 122–138, January 2013
How to Cite
Malinen, T. (2013), INEQUALITY AND GROWTH: ANOTHER LOOK WITH A NEW MEASURE AND METHOD. J. Int. Dev., 25: 122–138. doi: 10.1002/jid.2812
- Issue online: 13 DEC 2012
- Version of Record online: 20 JAN 2012
- EHII2008 inequality measure;
- panel data;
- generalised method of moments
Recent empirical research on the relationship between income inequality and economic growth has provided controversial results. Some studies predict a negative effect of inequality on growth and some a positive effect. Answers to the controversy have usually been sought in the problems of the estimation technique, the measure of inequality or in some form of non-linearity in the relationship between inequality and growth. This study accounts for these problems by using an improved measure of income distribution and a parametric group-related panel estimation. In conclusion, we find that the effect of inequality is likely to be non-linear. Copyright © 2012 John Wiley & Sons, Ltd.