Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach

Yobouet Thierry Bienvenu Gnangoin, Liangsheng Du, GuyRoland Assamoi, Akadje JeanRoland Edjoukou and Diby Francois Kassi
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Yobouet Thierry Bienvenu Gnangoin: School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China
Liangsheng Du: School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China
GuyRoland Assamoi: School of International Economics, Dongbei University of Finance and Economics, Dalian 116025, China
Akadje JeanRoland Edjoukou: School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, China

Economies, 2019, vol. 7, issue 4, 1-15

Abstract: This paper offers an empirical examination of the relationship between government spending’s, income inequality, and economic growth by using the case of 19 Asian countries from 2002 to 2017. For this purpose, the paper uses robust difference-GMM estimation and panel granger causality test. We found that gross domestic investment and regulatory quality are the main variables that contribute to these countries’ economic growth. While current government consumption reduces economic growth. Also, government expenditure on education and regulatory quality granger cause economic growth in these countries. However, the effect of government expenditure on education on economic growth is not significant. So, to increase their economic growth, this study recommends these countries’ governments to encourage gross domestic investment, maintain regulatory quality and reduce their current consumption. This study also concludes that income inequality has no impact on these countries’ economic growth for this period.

Keywords: public spending; income inequality; economic growth; Asian countries; panel data (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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