 The Relationship Between Economic Growth and Inequality: Evidence from the Age of Market LiberalismGerardo Angeles-Castro () Studies in Economics from School of Economics, University of Kent Abstract: Using a panel data set of selected countries, this paper shows that the inequality-growth relationship follows an ordinary-U curve during the period 1970-98, in which inequality first decreases and then increases with economic growth. In addition, there is some evidence that the increasing pattern may reverse at higher levels of income. A time-series approach shows that a substantial group of countries capture a minimum turning point in different years along the period and others follow a permanent positive trend. It also indicates that only a few countries reverse inequality in a latter stage and display a maximum turning point after the mid 1990s; these countries are associated with macroeconomic stability, high governance and moderate expansion of trade and FDI. Hence, the inequality-growth relationship during the era of market openness has tended to change towards a positive one, although it might reverse at a later stage. Keywords: Income Distribution; Economic Growth; Dynamic Panel Data Models; Time-Series Analysis. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:0601 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Studies in Economics from School of Economics, University of Kent School of Economics, University of Kent, Canterbury, Kent, CT2 7FS. |
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