Unsustainable Inequality: is there a turning point?

Laura Policardo, Lionello F. Punzo () and Edgar Sánchez Carrera ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: A threshold estimation technique applied to a panel of 13 Latin American countries over the 1970-2011 time period, reveals the existence of a threshold level for the most popular index of income inequality (Gini's): below it past values of the index or per capita GDP appear to be unable to explain current variations in inequality, while beyond such a level the former may account for the decrease in current income inequality. So, there seems to be a turning point for income inequality though per capita GDP would have no effects on its dynamics. This result contributes further evidence on the dubious existence of the Kuznets Curve, and it links up with recent critical literature on the theme of increasing inequality and its shortcomings for growth

Keywords: Dynamics of Income Inequality; Kuznets Curve; Threshold Effects (search for similar items in EconPapers)
JEL-codes: C23 D63 O40 O54 (search for similar items in EconPapers)
Date: 2016-01
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Citations: View citations in EconPapers (2)

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