INCOME INEQUALITY AND ECONOMIC GROWTH: EMPIRICAL INVESTIGATIONS ON THE TRANSMISSION CHANNELS

Jihene Sbaouelgi ()

Romanian Economic Business Review, 2013, vol. 8, issue 2, 75-92

Abstract: The aim of this paper is to quantify the transmission channels of income inequality on economic growth. We try to determine what is the most important channel through which income inequality affects growth. To do this, we will estimate our basic model with variable rates. Then, we will use a simultaneous equations model to decompose the direct and indirect effects of income inequality on economic growth. According to the results, corruption is the most important channel, while trade openness channel is the least important.

Keywords: income inequality; economic growth; transmission channels (search for similar items in EconPapers)
Date: 2013
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