Economic Growth and Income Inequality: Empirical Evidence from North African Countries

Zouheir Abida and Imen Mohamed Sghaier
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Zouheir Abida: University of Sfax, Faculty of Economics and Management of Sfax- Tunisia
Imen Mohamed Sghaier: University of Sfax, Faculty of Economics and Management of Sfax- Tunisia

Zagreb International Review of Economics and Business, 2012, vol. 15, issue 2, 29-44

Abstract: This paper examines the empirical relationship between economic growth and income inequality for 4 countries of North Africa (Tunisia, Algeria, Morocco and Egypt) over the period 1970-2007. The results of this paper indicate that the long-run growth elasticity of income inequality is negative and significant implying that keeping other factors constant; more income inequality reduces economic growth. Moreover, this paper finds evidence that more physical and human capital investment and higher openness to trade have statistically significant impact on enhancing economic growth and reducing poverty.

Keywords: Economic Growth; Income Inequality; Panel cointegration (search for similar items in EconPapers)
JEL-codes: I3 O15 O4 (search for similar items in EconPapers)
Date: 2012
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