_______________________________________________________________

_______________________________________________________________

Report Information from ProQuest
06 July 2014 21:50
_______________________________________________________________

06 July 2014 ProQuest
Table of contents
1. A refinement of the relationship between economic growth and income inequality..................................... 1
06 July 2014 ii ProQuest
Document 1 of 1

A refinement of the relationship between economic growth and income inequality
Author: Fawaz, Fadi; Rahnama, Masha; Valcarcel, Victor J

ProQuest document link
Abstract: There is mixed evidence in the literature of a clear relationship between income inequality and
economic growth. Most of that work has focused almost exclusively on developed economies. In what we
believe to be a first effort, our emphasis is solely on developing economics, which we classify as high-income
and low-income developing countries (HIDC and LIDC). We make such distinction on theoretical and empirical
grounds. Empirically, the World Bank has classified developing economies in this manner since 1978. The data
in our sample are also supportive of such classifications. We provide theoretical scaffolding that uses
asymmetric credit constraints as a premise for separating developing economies in such a way. We find strong
evidence of a negative relationship between income inequality and economic growth in LIDC to be in stark
contrast with a positive inequality-growth relationship for HIDC. Both correlations are statistically significant
across multiple econometric specifications. Using international data from 1960 to 2010, this article explores the
effect of income inequality on economic growth using dynamic panel technique, such as system generalized
method of moments (GMM) that is believed to mitigate endogenous problem. These results are strikingly
contrasting to the previous estimation results of Forbes (2000) displaying significant positive correlation
between two variables in the short to medium term.
Subject: Studies; Economic growth; Income inequality; Developing countries--LDCs; Economic impact;
Generalized method of moments;
Classification: 9130: Experiment/theoretical treatment; 1110: Economic conditions & forecasts
Publication title: Applied Economics
Volume: 46
Issue: 27
First page: 3351
Publication year: 2014
Publication date: 2014
Year: 2014
Publisher: Taylor & Francis Ltd.
Place of publication: London
Country of publication: United Kingdom
Publication subject: Business And Economics
ISSN: 00036846
CODEN: APPEBP
Source type: Scholarly Journals
Language of publication: English
Document type: Feature
06 July 2014 Page 1 of 2 ProQuest
ProQuest document ID: 1542882920
Document URL: http://search.proquest.com/docview/1542882920?accountid=48290
Copyright: Copyright Taylor & Francis Ltd. 2014
Last updated: 2014-07-04
Database: ABI/INFORM Complete,ProQuest Research Library
_______________________________________________________________

Contact ProQuest
Copyright 2014 ProQuest LLC. All rights reserved. - Terms and Conditions
06 July 2014 Page 2 of 2 ProQuest