GINI’s Odyssey in Greece: Econometric Analysis of Income Inequality, GDP, and Unemployment Through Economic Phases (Pre-Crisis, Crisis, Memoranda, and Post-Memoranda)

Panagiotis Karountzos, Nikolaos T. Giannakopoulos (), Damianos P. Sakas, Kyriaki I. Efthalitsidou and Stavros P. Migkos
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Panagiotis Karountzos: Department of Regional and Economic Development, School of Applied Economics and Social Sciences, Agricultural University of Athens, 118 55 Athens, Greece
Nikolaos T. Giannakopoulos: BICTEVAC Laboratory—Business Information and Communication Technologies in Value Chains Laboratory, Department of Agribusiness and Supply Chain Management, School of Applied Economics and Social Sciences, Agricultural University of Athens, 118 55 Athens, Greece
Damianos P. Sakas: BICTEVAC Laboratory—Business Information and Communication Technologies in Value Chains Laboratory, Department of Agribusiness and Supply Chain Management, School of Applied Economics and Social Sciences, Agricultural University of Athens, 118 55 Athens, Greece
Kyriaki I. Efthalitsidou: Department of Business Administration, School of Economic Sciences, University of Western Macedonia, 501 00 Kozani, Greece
Stavros P. Migkos: Department of Accounting & Finance, School of Economic Sciences, University of Western Macedonia, 501 00 Kozani, Greece

IJFS, 2024, vol. 12, issue 4, 1-19

Abstract: This study explores the relationship between income inequality, economic growth, and unemployment in Greece from 2003 to 2020, encompassing key economic phases: pre-crisis, crisis, memoranda, and post-memoranda. The aim is to analyze how economic growth (logarithm of GDP-LOGGDP) and unemployment influenced income inequality (GINI coefficient) during periods of economic turmoil and recovery. Using linear regression analysis on 18 years of annual data, this study identifies significant relationships between the variables, with diagnostic tests confirming model robustness. The findings reveal a strong positive and statistically significant relationship between LOGGDP and income inequality, indicating that economic growth, without effective redistributive mechanisms, exacerbated disparities. Unemployment had an even stronger positive effect on inequality, highlighting its role in deepening income disparities, particularly during the crisis years marked by economic contraction and austerity measures. These results underline the critical need for balanced economic policies that promote inclusive growth while addressing structural inequalities and labor market vulnerabilities. This study also employs advanced econometric methods, including Vector Autoregression (VAR), Vector Error Correction Model (VECM), and Granger Causality Test, to analyze the dynamics between GDP (LOGGDP), income inequality (GINI), and unemployment. The Granger Test reveals that unemployment Granger-causes GDP with a two-period lag, highlighting the importance of labor market conditions for economic growth, while no direct causal relationship is found between GDP and inequality. These methods provide deeper insights into the short- and long-term interactions, offering valuable guidance for balanced economic policymaking.

Keywords: economic growth; GDP; income inequality; GINI coefficient; unemployment; Greece; memorandum; financial crisis; econometric analysis (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2024
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