Income inequality measures and economic growth channels

Blotevogel, Robert; Imamoglu, Eslem; Moriyama, Kenji; Sarr, Babacar

doi:10.1016/j.jmacro.2022.103413

Cited by 10 publications

(3 citation statements)

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“…Only a few studies highlight the fact that the various mechanisms by which inequality affects economic growth can operate through different parts of the income distribution. This has led some authors to identify separate effects of inequality at the bottom and top tails (Litschig and Lombardi 2019;Voitchovsky 2005) or to study the sensitivity of the relationship to the inequality measure used (Blotevogel et al 2022).…”

Section: The Pattern Of the Income Distribution And Its Effects On De...mentioning

confidence: 99%

Inequality and human development: The role of different parts of the income distribution

Castells‐Quintana¹,

Gradín²,

Royuela³

2022

WIDER Working Paper

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Section: The Pattern Of the Income Distribution And Its Effects On De...mentioning

confidence: 99%

Inequality and human development: The role of different parts of the income distribution

Castells‐Quintana¹,

Gradín²,

Royuela³

2022

WIDER Working Paper

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“…Economic experts are now focusing their research on the redistribution element of taxation as a result of the persistence of significant income inequality both between and within countries (Khan and Khan 2021). Despite the fact that income disparity rises in the early phases of an economic expansion, he predicted that as the economy matures, it will finally start to decline (Blotevogel et al, 2022). However, distributional issues are now a critical challenge in many nations.…”

Section: Categories Of the Taxesmentioning

confidence: 99%

Impact of Tax Structure Dynamics, Human Resource Development and Distribution of Income on Economic Growth of Pakistan

Khan,

Babar,

Rehman

2022

J. educ. soc. stud.

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This study is carried out to investigate the impact of taxes on the economic growth of Pakistan. Tax is a compulsory payment to the government by the residents of the nation to cover the cost of services rendered by the government for the general welfare of its citizens. The debate and empirical results regarding the impact of taxes and specifically tax structure is highly controversial for researchers and policymakers. Economic growth is adversely affected by taxes, while some researchers claim a positive effect. Therefore it was felt to investigate the impact of tax structure on the economic growth of Pakistan. To test it empirically, the researcher took the time series data ranges from 1985 to 2021 on tax structure and economic growth. GDP growth is dependent, while tax structure, i.e., direct and indirect taxes, human development index, and income distribution, were selected as independent variables. After ensuring that the variables are stationary, the Autoregressive Distributive Lag (ARDL) approach to co-integration was applied to detect connections between variables. Results found that direct taxes have a positive and significant effect on GDP growth, while indirect taxes have a significant and negative impact on the GDP growth of Pakistan. Also, the impact of HDI on GDP growth is positive and significant, while the Gini coefficient has a negative and significant impact on the GDP growth of Pakistan. It is suggested that to increase the economic growth of Pakistan, direct taxes would be increased, as it will also reduce the Gini coefficient and unequal income distribution, While indirect taxes would be decreased to enhance economic growth. Also, the government should adopt such policies which could encourage human development, as it is crucial for the economic development of Pakistan.

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“…Nonetheless, both theoretical and empirical study on this subject is still in its infancy. Some studies have suggested that income variation devours a positive impact on growth, but often fail to explain the mechanisms through which it affects economic growth (Blotevogel, Imamoglu, Moriyama, and Sarr (2022); Gründler and Scheuermeyer (2018). The connection between economic growth and income inequality has been extensively debated and researched, particularly in developing countries such as Ethiopia.…”

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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Income inequality measures and economic growth channels

Cited by 10 publications

References 60 publications

Inequality and human development: The role of different parts of the income distribution

Inequality and human development: The role of different parts of the income distribution

Impact of Tax Structure Dynamics, Human Resource Development and Distribution of Income on Economic Growth of Pakistan

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

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