Does the Impact of Gini Index on Growth Differ among GCC Countries ?

Jihene Sbaouelgi () and Ghazi Boulila

MPRA Paper from University Library of Munich, Germany

Abstract: This paper tests whether inequality and economic growth in eleven Gulf Cooperation Council (GCC) countries are cointegrated, and estimates the impact of inequality on growth in each country separately in case cointegration exists. Assuming that each country has its own inequality-growth relationship, the paper uses time series data to estimate the impact of inequality on growth individually in each GCC country by making use of single equation cointegration techniques robust to small sample sizes such as dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and canonical cointegration regression (CCR). Results show that the impact of inequality on growth differs among GCC countries. The paper is valuable to policy makers in GCC countries, especially the Arab Spring countries, who aim to achieve higher growth rates by improving income inequality. The paper shows whether measures aimed at ameliorating income distribution will positively or negatively affect economic growth.

Keywords: Gulf Cooperation Council countries (GCC), Economic growth; income inequality; Cointegration; Unit root tests (search for similar items in EconPapers)
JEL-codes: C23 C26 O11 O15 O53 (search for similar items in EconPapers)
Date: 2016-02-15
New Economics Papers: this item is included in nep-ara and nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70564

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