The relationship between economic growth and income inequality and its institutional aspects

Gulzar Tahirova and Ramiz Rahmanov
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Gulzar Tahirova: Central Bank of Azerbaijan Republic

No 1504, Working Papers from Central Bank of Azerbaijan Republic

Abstract: This paper aims to determine the channels through which income inequality affects economic growth using the fixed effects, random effects, and GMM techniques. The analysis covers developed, developing and CIS countries over the period 1980-2010. Our estimation results show that in the developing countries, the significant channel is government expenditure; in the developing countries, the significant channels are investment and human capital; in the CIS countries, the significant channels are government expenditure and investment. For all country groups, the relationship between income inequality and economic growth is negative.

Keywords: income inequality; economic growth; institutions (search for similar items in EconPapers)
JEL-codes: D31 D33 H30 H31 O11 O43 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015-12-01
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Persistent link: https://EconPapers.repec.org/RePEc:aze:wpaper:1504

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