Different ways of looking at old issues: a time-series approach to inequality and growth

Gobbin, Niko; Rayp, Glenn

doi:10.1080/00036840600771106

Cited by 17 publications

(17 citation statements)

References 46 publications

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“…The discrepancy of this equilibrium can be modeled by a vector error correction (VEC) model which shows how after a shock the variables come back to the equilibrium. Gobbin and Rayp (2008) pointed out that a cointegrated VAR-setting approach is the proper way to cope and avoid the problems of parameter heterogeneneity, omitted variable bias and endogeneity of the variables.…”

Section: Dataset and Methodologymentioning

confidence: 99%

“…Hence, the aim of this paper is to offer a proper answer to the issue inequality-growth nexus by using a cointegrated vector autoregressive (VAR)-setting approach, in this way, we can cope and avoid the problems of parameter heterogeneneity, omitted variable bias and endogeneity, from which suffers the model of macroeconometric analysis (Gobbin and Rayp, 2008).…”

Section: Introductionmentioning

confidence: 99%

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Inequality and economic growth in China

Risso

Carrera²

2012

Journal of Chinese Economic and Foreign Trade Studies

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to study the long-run relationship between economic growth and income inequality in China during the pre-reform and post-reform (1979-2007) periods, this will be done via cointegration analysis. Design/methodology/approach -The aim of this paper is to offer a proper answer to the issue of the inequality-growth nexus by using a cointegrated VAR-setting approach, in this way, the study can cope and avoid the problems of parameter heterogeneneity, omitted variable bias and endogeneity, from which the model of macroeconometric analysis suffers.Findings -The cointegration analysis shows that, for both periods the relationship is positive and the inequality-growth elasticity has grown in the second period. In addition, a more robust test of Granger-causality suggested by Toda and Yamamoto indicates that whereas in the first period there is unidirectional causality from inequality to growth, there is no directional causality in the second period. Practical implications -The pre-reform period going from 1952 to 1978 is characterized by the adoption and implementation of a Soviet-type economy. The economy showed a modest annual economic growth rate of 2.33 percent and very low levels of inequality, with an average Gini coefficient of 0.27. The post-reform period tried to combine central planning with market-oriented reforms to increase productivity. In fact, the economy has grown at an annual growth rate of 7.07 percent since 1979 and also the inequality with an average Gini coefficient of 0.33. Originality/value -The paper studies the relationship between income inequality and economic growth in China during the pre and post reform periods. A significant and positive long-run relationship between inequality and economic growth in both periods was found. The inequality-growth elasticity is greater in the post-reform than the pre-reform period. Using a more robust Granger causality test the authors find a unidirectional predetermination between the variables for the whole period and for the pre-reform period. However, there is not causality in the post-reform period. Except the urban-rural disparity which explains the unidirectional causality from ...

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Section: Dataset and Methodologymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Inequality and economic growth in China

Risso

Carrera²

2012

Journal of Chinese Economic and Foreign Trade Studies

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“…Table A1 reports each ARDL estimation and the Bounds test for cointegration under the null hypothesis of no cointegration. 15 All models estimated included dummy variables to capture the structural break e¤ects. One dummy variable was assigned for each indicator for each country.…”

Section: A5 Local Stability Analysis For the Dynamic System (35)-(38mentioning

confidence: 99%

“…This is because an omitted variable will either be stationary -in which case the estimated coe¢ cients are invariant to its inclusion -or it will be non-stationary -in which case we will not be able to obtain a stable cointegrating relationship if we leave it out. For a further discussion and references on the econometric properties of the time-series approach seeGobbin and Rayp (2008) 15. In order to con…rm that all series are at most integrated of order one we perform for each country two di¤erent group unit root tests.…”

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confidence: 99%

Distributive cycles and endogenous technical change in a BoPC growth model

Dávila‐Fernández¹,

Sordi²

2019

Economic Modelling

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Our purpose in this paper is to expand Goodwin's (1967) distributive cycle model to an open economy framework in a way that incorporates the balance-of-payments constraint on growth. We do so by allowing technical change to be endogenous to the cyclical dynamics of the system and by adopting an independent investment function. We show that a Hopf-Bifurcation analysis establishes the possibility of persistent and bounded cyclical paths both for a 3D and a 4D extension of the model. Some numerical simulations are performed based on the analytical models developed. Motivational empirical evidence is also provided for Thirlwall's law and the respective adjustment mechanism using a sample of 17 OECD countries.

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“…There are some potential econometric problems in the estimating of the production function such as non-stationarity, causality, and omitted variables, see e.g. discussion in Gramlish (1994) and Holtz-Eakin (1994), as well as Temple (1999) and Gobbin and Rayp (2008). We have addressed these problems by using a pooled cross-sectional and time series data, allowing us to use fixed effects, and estimated the model in an error-correction framework.…”

Section: Methodsmentioning

confidence: 99%

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

Wilhelmsson

Wigren

2011

Applied Economics

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Our main objective is to analyse whether we have a problem of parameter heterogeneity across countries and over time in the estimation of the relationship between infrastructure investments and economic growth. The research approach concerning causality and the estimating of the long-run equilibrium is based on the error-correction model. The problem of parameter heterogeneity is handled by the use of interaction terms. The result indicates that residential construction Granger causes Gross Domestic Product (GDP) in the short and long run and it seems likely that the interaction term indicating high unemployment do add some explanation power to the model. This is not true when it comes to infrastructural and other building construction and its impact on economic growth. A high housing stock per capita seems to reduce the short-run effect. This implies that residential construction seems to have a larger effect if the accumulated residential stock is on a low level. The speed of adjustment to long-run equilibrium differs considerably between a country with a low residential capital stock and a country with a high-capital stock. Moreover, high owner occupation rates seem to be associated with a stronger relationship between residential construction and economic growth.

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Different ways of looking at old issues: a time-series approach to inequality and growth

Cited by 17 publications

References 46 publications

Inequality and economic growth in China

Inequality and economic growth in China

Distributive cycles and endogenous technical change in a BoPC growth model

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

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