Relations Between Income Inequality, Economic Growth and Poverty Threshold: New Evidences From Eu Countries Panels

Abstract

This paper analyses the relationship between the following indicators: income inequality, gross domestic product, risk of poverty threshold and median equivalized net income for a panel of 28 countries of European Union (EU) over the period 2005-2016. Two theoretical regression models, a linear and a quadratic one, are used to estimate the influence on income inequality of the other three indicators. Empirical estimations, using panel data techniques on three different data panels, confirm the Kuznets hypothesis that income inequality tends to increase with early economic development and tends to decrease when a country reaches a certain level of development. We found that for emerging EU countries, income inequality has a growing tendency with a positive economic growth and maybe reduced by increasing risk of poverty threshold or median equivalized net income. For highly developed EU countries the situation is completely opposite. At EU level, the influence of gross domestic product on income inequality is strongly determined by its trend in the highly developed EU countries, while the influence of risk of poverty threshold and median equivalized net income on income inequality is strongly determined by their trend in the emerging EU countries.

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

“…Remittances are an important source of foreign transfers to developing countries and can be considered a financial mechanism for development. The trend of this currency inflow in the countries of origin obviously illustrates that the value of remittances decreases visibly [8,55], and the strategic analysis of this trend, especially due to the COVID-19 pandemic cannot be optimistic-foreign exchange inflows into countries of origin will fall drastically. The economic and geopolitical situation of the host countries is only one of these factors, but the UK's exit from the EU (1 January 2020) will clearly have a negative impact on remittance inflows to the external balance of payments of emerging countries.…”

Causality Between Energy Consumption and Economic Growth in the V4 Countries

“…The results of this research suggest a positive impact of energy consumption on economic growth, and there were confirmed bidirectional or unidirectional Granger causalities between the two macroeconomic variables, for each of 28 countries. The following paper (Soava et al, 2020) investigates relations between income inequality, economic growth and poverty threshold (EU countries panels). The article (Saad & Taleb, 2018) analyses and compares the short-run and long-run relationship between renewable energy consumption and economic growth in 12 European Union countries during period from 1990 to 2014.…”

Comparative investigation of the growth-poverty-inequality trilemma in Sub-Saharan Africa and Latin American and Caribbean Countries

“…Income inequality tends to increase in emerging economies with economic growth, but the opposite obtains in the highly developed countries (Soava and Sterpu, 2020). Moreover, expressions of poverty and inequality, amidst GDP growth, are exacerbated by climate disruptions, global health pandemics (like COVD-19) and macroeconomic shocks.…”