INEQUALITY, TRADE OPENNESS AND ECONOMIC GROWTH IN ASIA

Muhammad Majeed

Applied Econometrics and International Development, 2010, vol. 10, issue 2

Abstract: Using a panel data set for 18 Asian countries over the period 1970-2007, this study explores the relationship between economic growth and income inequality with special focus on the role of credit market imperfections in shaping the linkage. The study identifies credit market imperfections in developing countries as the likely reason for a positive relation between inequality and economic growth. Countries in the region with high financial intermediation tend to grow more as compare to low financial intermediation. Moreover, this paper finds evidence that more physical and human capital investment have statistically significant and positive effect on economic growth. Finally, openness to trade has been confirmed positive and significant in this region, thereby implying outward looking economies grow more.

Keywords: economic growth; inequality; credit market imperfection; panel data (search for similar items in EconPapers)
JEL-codes: E25 O15 O40 O47 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (8)

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Working Paper: Inequality, Trade Openness and Economic Growth in Asia (2010)
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