Inequality and Growth: Does Time Change Anything

Niko Gobbin () and Glenn Rayp

Development and Comp Systems from EconWPA

Abstract: The econometric analysis of economic growth has always been subject to major flaws and shortcomings. Data scarcity and reliability, parameter heterogeneity, omitted variables bias, endogeneity problems, ... have seriously tainted estimation results. In this paper we propose an alternative framework that explicitly deals with these issues. We investigate the relation between income inequality and economic growth in a number of OECD countries in a cointegrated VAR-setting. Our results suggest that different models seem to hold for different countries. However, for most countries the imperfect markets model better describes reality than the complete markets model.

Keywords: income inequality; economic growth; cointegrated VAR (search for similar items in EconPapers)
JEL-codes: O P (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-mac
Date: 2004-02-16
Note: Type of Document - pdf; prepared on Win2000; pages: 31; figures: Figures in document
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http://129.3.20.41/eps/dev/papers/0402/0402005.pdf (application/pdf)

Related works:
Working Paper: Inequality and Growth: Does Time Change Anything? (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpdc:0402005

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