Inequality and growth: evidence from panel cointegration

Dierk Herzer and Sebastian Vollmer

The Journal of Economic Inequality, 2012, vol. 10, issue 4, 489-503

Abstract: This paper uses heterogeneous panel cointegration techniques to estimate the long-run effect of income inequality on per-capita income for 46 countries over the period 1970–1995. We find that inequality has a negative long-run effect on income, both for the sample as a whole and for important sub-groups within the sample (developed countries, developing countries, democracies, and non-democracies). The effect is economically important, with a magnitude about half as high as the magnitude of an increase in the investment share. Copyright The Author(s) 2012

Keywords: Inequality; Growth; Panel cointegration; O11; O15; C23 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (106)

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DOI: 10.1007/s10888-011-9171-6

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