Income inequality measures and economic growth channels

Robert Blotevogel, Eslem Imamoglu, Kenji Moriyama and Babacar Sarr

Journal of Macroeconomics, 2022, vol. 72, issue C

Abstract: This paper shows that the choice of inequality measure has a first-order impact on estimated empirical relationships. Depending on the particular inequality measure chosen, the estimated role of inequality in the transmission channels to economic growth varies and is therefore difficult to pin down with confidence. We run our analyses with six inequality measures (Gini coefficients and Top10 income shares). All six are measured consistently over time and across countries but based on distinct definitions of income—giving rise to measurement uncertainty. Differences in measurement within the set of Gini coefficients and the Top10 income shares exert a significant impact on the estimated relationships, which is generally more pronounced than the effect of switching between Gini and Top10 income shares. Finally, we show that the distinction between short- and long-run effects of inequality also becomes empirically less relevant when we allow for measurement uncertainty. We do not find a unique and stable structural relationship between inequality and the transmission channels.

Keywords: Economic growth; Growth transmission channels; Income inequality; Inequality measurement; Measurement Uncertainty (search for similar items in EconPapers)
JEL-codes: D31 O15 P36 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070422000167
Full text for ScienceDirect subscribers only

Related works:
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:jmacro:v:72:y:2022:i:c:s0164070422000167

DOI: 10.1016/j.jmacro.2022.103413

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().