IS THERE CAUSALITY RELATIONSHIP BETWEEN ECONOMIC GROWTH AND INCOME INEQUALITY?: PANEL DATA EVIDENCE FROM INDONESIA

Khairul Amri () and Nazamuddin ()
Additional contact information
Nazamuddin: Syiah Kuala University, Indonesia

Eurasian Journal of Economics and Finance, 2018, vol. 6, issue 2, 8-20

Abstract: Our study aims to determine the causality relationship between economic growth and income inequality. Using panel data set of 26 provinces from Indonesia for a period of 2005 to 2015, Pedroni's co-integration test, Panel Vector Error Correction Model, and Granger Causality Test were employed to analyze the relationship between the variables. Accordingly, the first main finding of the research is that there is a negative and significant relationship between the economic growth and income inequality in the long-run. Secondly, in the short run, the economic growth is positively and insignificantly related to income inequality. In addition, there is a unidirectional causality running from income inequality to economic growth.

Keywords: Economic Growth; Income Inequality; Panel VECM and Granger Causality Test (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://eurasianpublications.com/wp-content/uploads/2021/02/EJEF-6.2.2.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ejn:ejefjr:v:6:y:2018:i:2:p:8-20

Access Statistics for this article

Eurasian Journal of Economics and Finance is currently edited by Xuan Vinh Vo

More articles in Eurasian Journal of Economics and Finance from Eurasian Publications
Bibliographic data for series maintained by Esra Barakli ().