Agriculture and Non-Agriculture Growth, Inflation and Income Inequality in Developed and Developing Countries

Sima Siami-Namini

International Journal of Economics and Finance, 2019, vol. 11, issue 11, 43

Abstract: The aim of this article is to examine how agriculture and non-agriculture growth and inflation affect income inequality. The multivariate panel data approach is used to examine the application of Kuznets hypothesis between income inequality and agriculture and non-agriculture growth and test the existence of nonlinear relationship between income inequality and inflation rate in a large sample of data collected for developed and developing countries. The Hodrick-Prescott (HP) filter is used to separate the cyclical component from the trend component of inflation rate and agriculture and non-agriculture growth. The results demonstrate a significant negative nonlinear relationship between income inequality and the HP filtered inflation rate squared in developed countries. The findings confirm the application of a ¡®U-shaped¡¯ of Kuznets curve between income inequality and agriculture growth and between income inequality and non-agriculture growth in developed countries. In addition, the results show Kuznets inverted ¡®U-shaped¡¯ curve between agriculture growth and income inequality, and Kuznets ¡®U-shaped¡¯ curve between non-agriculture growth and income inequality in developing countries.

Keywords: inflation; income inequality; agriculture and non-agriculture growth; multivariate panel data approach (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:11:y:2019:i:11:p:43

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