RELATION BETWEEN INCOME INEQUALITY AND ECONOMIC GROWTH: CASE STUDY OF LATIN AMERICA AND THE CARIBBEAN

Barbora Janubova ()
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Barbora Janubova: University of Economics in Bratislava

Medzinarodne vztahy (Journal of International Relations), 2021, vol. 19, issue 1, 31-47

Abstract: The aim of the paper is to evaluate the relation between economic growth and income inequality. We briefly analyze the current state of income inequality and economic growth in Latin America and the Caribbean. Subsequently, we examine through the regression analysis whether the income inequality in the region has a negative impact on economic growth and vice versa. We conclude that high income inequality leads to lower economic growth, while economic growth in the more advanced Latin American countries is not based on the accumulation of human capital. Furthermore, GDP growth p.c. reduces income inequality for a group of more developed Latin American economies. In the case of less developed countries, we see a positive effect of GDP p.c. to increase income inequality.

Keywords: Latin America and the Carribean; economic growth; income inequality (search for similar items in EconPapers)
JEL-codes: D63 O40 O47 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:brv:journl:v:19:y:2021:i:1:p:31-47

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