The effect of growth volatility on income inequality

Ho-Chuan Huang (), WenShwo Fang, Stephen Miller and Chih-Chuan Yeh

Economic Modelling, 2015, vol. 45, issue C, 212-222

Abstract: This paper assesses the long-run effect of growth volatility on income inequality using a comprehensive panel of annual U.S. state-level data during the 1945 to 2004 period. Using the pooled mean group (PMG) estimator, we find evidence supporting the hypothesis that larger growth volatility positively and significantly associates with higher income inequality. Our key finding is robust to alternative lag structures, conditioning variables, inequality measures, volatility indicators, time periods, and panel estimators. Our key finding does change for asymmetric effects, where larger growth volatility positively and significantly associates with higher income inequality only for positive economic growth. The volatility effect proves positive, but insignificant, for negative economic growth.

Keywords: Income inequality; Growth volatility; Pooled mean group estimator (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999314004593
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Effect of Growth Volatility on Income Inequality (2012)
Working Paper: The Effect of Growth Volatility on Income Inequality (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:45:y:2015:i:c:p:212-222

DOI: 10.1016/j.econmod.2014.11.020

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().