Income Inequality and Economic Growth Relationship in Bulgaria: An Empirical Analysis

Hristo Mavrov
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Hristo Mavrov: University of Economics - Varna, Bulgaria

Scientific Conference of the Department of General Economic Theory, 2022, issue 1, 29-37

Abstract: The paper examines the long-run relationship between income inequality and economic growth in Bulgaria for the period 1980-2018. Cointegration analysis is used and it is proved that the non-linear relationship between income inequality and economic growth is in the form of an inverted-U curve. The calculated optimal rate of income inequality measured by the Gini index is 29.7. This level of Gini index has been significantly exceeded since 2006 in Bulgaria. The main policy message is that income redistribution can increase GDP per capita, but only if the public sector is reformed.

Keywords: Еconomic growth; GDP per capita; Gini coefficient; Bulgaria; Income inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 O47 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrn:oitcon:y:2022:i:1:p:29-37

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