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The Effects of Income Inequality and Redistribution in Democracies: A Dynamic Panel Data Approach

Goksu Aslan ()

Dynamic Econometric Models, 2017, vol. 17, 19-39

Abstract: In this paper, the simultaneous effects of the inequality and redistribution on economic growth are tested for the whole sample and for a subset of democratic countries, following SYS-GMM estimation on a panel dataset over a period from 1960 to 2010. Overall, net inequality has a negative significant effect on subsequent 5 years for both samples, while redistribution impact is only significant in democracies. The findings are consistent with the fact that governments tend to significantly redistribute more in democracies.

Keywords: democracy; economic growth; inequality; redistribution (search for similar items in EconPapers)
JEL-codes: C23 E62 O40 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:cpn:umkdem:v:17:y:2017:p:19-39