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INEQUALITY AND GROWTH: ANOTHER LOOK WITH A NEW MEASURE AND METHOD
Author(s) -
Malinen Tuomas
Publication year - 2013
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.2812
Subject(s) - inequality , economics , econometrics , measure (data warehouse) , economic inequality , estimation , income distribution , income inequality metrics , panel data , distribution (mathematics) , parametric statistics , mathematics , statistics , computer science , mathematical analysis , management , database
Recent empirical research on the relationship between income inequality and economic growth has provided controversial results. Some studies predict a negative effect of inequality on growth and some a positive effect. Answers to the controversy have usually been sought in the problems of the estimation technique, the measure of inequality or in some form of non‐linearity in the relationship between inequality and growth. This study accounts for these problems by using an improved measure of income distribution and a parametric group‐related panel estimation. In conclusion, we find that the effect of inequality is likely to be non‐linear. Copyright © 2012 John Wiley & Sons, Ltd.