In search of thresholds in the household income inequality–growth relationship

Suzanna‐Maria Paleologou

Economics of Transition and Institutional Change, 2019, vol. 27, issue 4, 989-1008

Abstract: This paper investigates the shape of the relationship between household income inequality and economic growth. More precisely we search for the existence of threshold values in this relationship by employing a dynamic panel smooth transition regression model to account for potential endogeneity problems. We find that there do exist threshold values (that are different for different groups of countries): below the threshold, household income inequality is growth enhancing, while above the threshold, inequality has a negative or no effect on economic growth.

Date: 2019
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https://doi.org/10.1111/ecot.12228

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Persistent link: https://EconPapers.repec.org/RePEc:wly:ectrin:v:27:y:2019:i:4:p:989-1008

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