Further Evidence on Import Demand Function and Income Inequality

Ioanna Konstantakopoulou

Economies, 2020, vol. 8, issue 4, 1-12

Abstract: In advanced economies, rising inequality has become a significant economic issue. Our paper examines one dimension of the impact of inequality. This study employs panel estimators that tackle heterogeneity and cross-sectional dependence to estimate the impact of income inequality on import demand. In addition, we use a Bayesian approach to the cointegrated VAR model as well as a model that allows for stochastic trends and cross-sectional dependence. Annual panel data for the period from 1995 to 2016 on OECD countries are used. The empirical results show that inequality has a positive and significant effect on import demand. The estimation also yields some other expected results, viz. that the income and price elasticity of import demand function are positive and negative, respectively.

Keywords: import demand; income inequality; cross-sectional dependence; system GMM; panel cointegrated VAR (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7099/8/4/91/pdf (application/pdf)
https://www.mdpi.com/2227-7099/8/4/91/ (text/html)

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:gam:jecomi:v:8:y:2020:i:4:p:91-:d:433916

Access Statistics for this article

Economies is currently edited by Ms. Hongyan Zhang

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().