Issue of Income Inequality under the perceptive of Macroeconomic Instability: An Empirical Analysis of Pakistan
Amjad Ali ()
MPRA Paper from University Library of Munich, Germany
This study has investigated the impact of macroeconomic instability on income inequality in Pakistan over the period of 1980 to 2015. A comprehensive macroeconomic instability index has been constructed by incorporating inflation rate, unemployment rate, trade deficit and budget deficit. Stationarity of data is checked with the help of Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Dickey-Fuller Generalized Least Squares (DF-GLS) unit root tests. Autoregressive Distributed Lag (ARDL) model has been used for examining the co-integration among the variables of the model and Vector Error-Correction model has been used for short run dynamics of the model. The empirical results of the study confirm the existence of co-integration between macroeconomic instability and income inequality in Pakistan. The results of the study show that macroeconomic instability has deep rooted impact on income inequality in case of Pakistan. Hence, for achieving desired level of income distribution, Pakistan should make its macroeconomic environment stable.
Keywords: macroeconomic instability; income inequality; Pakistan; co-integration (search for similar items in EconPapers)
JEL-codes: C43 C51 C52 D63 F62 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/74963/1/MPRA_paper_74963.pdf original version (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:74963
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().