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

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TOPUZ S. G.

Social Indicators Research, cilt.162, sa.3, ss.1177-1231, 2022 (SSCI) identifier identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 162 Sayı: 3
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1007/s11205-022-02882-0
  • Dergi Adı: Social Indicators Research
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, FRANCIS, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Abstracts in Social Gerontology, Business Source Elite, Business Source Premier, CAB Abstracts, Communication & Mass Media Index, EBSCO Education Source, EconLit, Geobase, Index Islamicus, Philosopher's Index, Political Science Complete, Psycinfo, Public Administration Abstracts, Public Affairs Index, Social services abstracts, Sociological abstracts, Veterinary Science Database, Worldwide Political Science Abstracts
  • Sayfa Sayıları: ss.1177-1231
  • Anahtar Kelimeler: Income inequality, Economic growth, Transmission channels, Income classification, POLITICAL INSTABILITY, PANEL-DATA, REDISTRIBUTION, DETERMINANTS, VOLATILITY, FERTILITY, REASSESSMENT, INFLATION, WEALTH, NORTH
  • Eskişehir Osmangazi Üniversitesi Adresli: Evet

Özet

© 2022, The Author(s), under exclusive licence to Springer Nature B.V.This study aims to determine whether the effect of income inequality on economic growth is realised through transmission channels theoretically expressed. This relationship is examined for 143 countries and the periods between 1980 and 2017 through positive and negative channels. These countries are divided into two groups by considering their income levels and they are analysed with panel data econometric techniques. Although the findings provide evidence that high inequality adversely affects economic growth, it can be stated that this inference cannot be generalized when countries' income levels are taken into account. Countries with higher inequality tend to have higher fertility rates and less innovative activity. The financial market imperfections in developing countries adversely affect human capital investments. On the other hand, high inequality tends to increase saving propensity in developed countries and provides evidence for the positive channel. The findings highlight the complexity of the impact of income inequality on economic growth. Therefore, indirect impact needs to be scrutinized and policy recommendations need to be carefully designed.