The Effect of Growth Volatility on Income Inequality

Ho-Chuan Huang (), WenShwo Fang and Stephen Miller

No 1203, Working Papers from University of Nevada, Las Vegas , Department of Economics

Abstract: This paper assesses the long-run effect of growth volatility on income inequality using a comprehensive panel of annual U.S. state-level data during the 1945 to 2004 period. Using the pooled mean group (PMG) estimator, we find overwhelming evidence supporting the hypothesis that larger growth volatility positively and significantly associates with higher income inequality. In addition, our key finding is robust to alternative lag structures, conditioning variables, inequality measures, volatility indicators, and time periods.

Keywords: Income Inequality; Growth Volatility; Mean Group Estimator; Pooled Mean Group Estimator (search for similar items in EconPapers)
JEL-codes: C23 D31 O40 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012-04
New Economics Papers: this item is included in nep-fdg
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The effect of growth volatility on income inequality (2015)
Working Paper: The Effect of Growth Volatility on Income Inequality (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:nlv:wpaper:1203

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