Income Inequality and Economic Freedom Revisited: Are Freedom and Equality Conflicting Values? Evidence from the twenty-first Century

Daniel Machado and José Alberto Fuinhas ()

International Economic Journal, 2023, vol. 37, issue 2, 294-323

Abstract: This empirical research addressed the short – and long-run relationship between economic freedom (and its subcomponents) and income inequality using a panel of 102 countries between 2000 and 2018. The results of employing an autoregressive distributed lag model showed that economic freedom has a detrimental impact on income inequality measured by any of the main inequality indicators. However, the results point to a relatively inelastic relationship. Additionally, the study explored the interactions between the subcomponents of economic freedom and income inequality, again pointing to a rigid relationship. While the size of the government and legal property rights increase income inequality, deregulation exerts the opposite effect. This paper closes with future guidelines for research.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:taf:intecj:v:37:y:2023:i:2:p:294-323

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DOI: 10.1080/10168737.2023.2212251

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