The Relationship Between Income Inequality and Economic Growth: Are Transmission Channels Effective?

Topuz, Seher Gülşah

doi:10.1007/s11205-022-02882-0

Cited by 35 publications

(15 citation statements)

References 89 publications

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“…It indicates that a 1% increase in economic growth contributes to an increase in the unequal distribution of income by 0.021% in the simple model, while 0.039% in the interactive Model-I, and 0.027% in the interactive Model-II. The present study’s findings are parallel with the outcomes of the studies conducted by [ 40 , 41 ]. They contend that the uppermost wealthy class receives a greater share of the growth.…”

Section: Resultssupporting

confidence: 89%

Impact of foreign direct investment on income inequality: Evidence from selected Asian economies

et al. 2023

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The United Nations lists 17 Sustainable Development Goals for Agenda 2030, one of which is SDG-10, which focuses on eradicating inequality and addressing critical regional and global challenges. The fight against income inequality is heavily dependent on foreign direct investment all over the world. In this connection, the present study aimed to investigate the individual and interactive impact of foreign direct investment, human capital, and economic growth on income inequality by employing the interactive model. Based on the panel data set covering ten counties spanning each region of Asia from 1990 to 2020. In light of the slope homogeneity, cross-sectional dependency tests, and Westerlund co-integration test, we discover that all of the variables are cointegrated over the long run. A cross-sectional IPS (CIPS) unit root test is employed to check stationarity. Additionally, the study used the Augmented Mean Group (AMG) approach to produce accurate results in estimation. The results confirm that FDI affects inequality negatively. However, the impact of FDI is more effective in the presence of human capital. It means that human capital deepens the effect of FDI on inequality; the country will be more effective in reducing inequality by having a higher level of human capital and consider it a more powerful tool to bring equality. To reduce inequality, it is suggested that a policy mix of FDI and HC could be made.

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Section: Resultssupporting

confidence: 89%

Impact of foreign direct investment on income inequality: Evidence from selected Asian economies

et al. 2023

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“…They discovered that an increase in inequality is linked to a decrease in economic growth. In contrast, Topuz (2022) evaluated the relationship between income inequality and economic growth in a panel of developing countries. He summarized that the higher levels of inequality can lead to lower levels of economic growth, indicating a negative correlation between the two variables.…”

Section: On Linking the Economic Growth And Income Inequalitymentioning

confidence: 99%

A Conceptual Study on Income Inequality and Economic Growth in Bangladesh

2023

JESD

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Reducing income inequality through economic growth remains a debatable issue in economic development literature and has long been the subject of extensive research. The relationship between these two factors is complex and dynamic, with the direction and strength of the relationship varying across countries and over time. Bangladesh as a developing country keeps a commendably steady growth of GDP in the recent decade. While it is believed that the growth trajectory pours its benefits in curbing income inequality, in reality, the poorer become the poorest, and the richer become the richest over the decade in Bangladesh. Therefore, the debate over economic growth and income inequality has become a great controversy. Numerous studies in Bangladesh have investigated the connection between economic growth and income inequality, but the results have been inconclusive. While some research has revealed a link between income inequality and economic growth, other studies have not identified any notable association. The issue of income inequality in Bangladesh is further complicated by the country's ongoing efforts to reduce poverty, which has resulted in both positive and negative impacts on income inequality. The lack of consensus in the literature highlights the need for continued research in this area. In light of these findings, the purpose of this conceptual paper is to review the existing literature on the relationship between income inequality and economic growth in Bangladesh. This paper provides a comprehensive overview of the various theories and empirical studies that have been conducted in this area, including the latest findings and research gaps. The paper concludes by highlighting the need for further research in order to better understand the complex and dynamic relationship between income inequality and economic growth in Bangladesh.

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“…Notable examples of such studies (see Ibrahima, Okem, and Reysz., 2023;Mtapuri, 2023;Napolitano, Sbardella, Consoli, Barbieri, & Perruchas, 2022;Chan, Yang, andZheng, 2022 andMuhammad, Ozcan, Jain, Ramos-Meza, &Chawla, 2022). Other studies look at the connection between income inequality and investment (Melki, 2022), foreign direct investment (Wang, Xu, Liu, and Sun, 2023), economic growth (Topuz, 2022), remittances (Tung & Thang, 2023), household debt and financial crises (Ari & Cergibozan, 2023), and finance capitalism (Akizhanov, 2023a). These studies provide valuable insights into the intricate relationship between income inequality and various economic outcomes, and offer potential policy solutions to address the issue.…”

Section: Introduction 11 Background Of Studymentioning

confidence: 99%

Unraveling the Mechanisms of Income Inequality on Economic Growth in Ethiopia: Insights from Empirical Analysis

Hordofa

2023

Preprint

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The aim of this research was to investigate how income inequality impacts the economic growth of Ethiopia by analyzing the various ways in which it influences economic growth. The study gathered an exclusive dataset from diverse secondary sources that ranged from 1981 to 2016. To examine the link between transmission channels, inequality of income, and growth, the study utilized a stepwise regression autoregressive distributed lag (ARDL) approach. The research concluded with four lines of reasoning, including political economy, innovation, fertility, and saving channels. According to the findings, inequality of income has a positive impact on innovative activities and total savings as measured by gross fixed capital formation, but it only has a negative and significant effect on economic growth through the channels of innovation and savings. While caution should be taken when generalizing the findings to other countries, this study offers valuable insights into the intricate link between income inequality and economic growth specifically in Ethiopia. The study recommends that policymakers implement targeted policies to address the different transmission channels through which income inequality affects economic growth, to comprehensively tackle this issue.

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The Relationship Between Income Inequality and Economic Growth: Are Transmission Channels Effective?

Cited by 35 publications

References 89 publications

Impact of foreign direct investment on income inequality: Evidence from selected Asian economies

Impact of foreign direct investment on income inequality: Evidence from selected Asian economies

A Conceptual Study on Income Inequality and Economic Growth in Bangladesh

Unraveling the Mechanisms of Income Inequality on Economic Growth in Ethiopia: Insights from Empirical Analysis

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