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The Effects of Gaps and Disparities on Economic Growth. A Study of 10 Former Socialist Countries from the CEE, Members of the EU

Author

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  • Maru?a Pescu (Beca)

    (Universitatea Ovidius din Constan?a)

  • Camelia ?tefan (Baraba?)

    (Academia de Studii Economice din Bucure?ti)

Abstract

The goal of this research paper is to empirically assess the potential effects of macroeconomic determinants of economic growth and to determine the impact of income inequality on economic growth in the long-run in ten former socialist countries from Central and Eastern Europe (CEE) which are members of the European Union (EU) during the period 2006-2014, using the System Generalized Method of Moments (GMM) as the research method. In order to achieve all the desired research objectives the following explanatory variables were used: income inequality (Gini Index), foreign direct investments (FDI), education, research and development expenditure, exports, population growth, labour productivity, tax rate, inflation rate and the Corruption Perception Index (CPI). The dependent variable employed in the empirical analysis, a proxy for the economic growth, is GDP per capita growth (annual %). The main finding of this paper’s investigations is that income inequality has a positive and statistically significant impact on economic growth and a 1% increase in the Gini coefficient enhances the GDP by 0.68% in the ten former socialist Central and Eastern European (CEE) countries which are members of the European Union (EU) during the period 2006-2014.

Suggested Citation

  • Maru?a Pescu (Beca) & Camelia ?tefan (Baraba?), 2016. "The Effects of Gaps and Disparities on Economic Growth. A Study of 10 Former Socialist Countries from the CEE, Members of the EU," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(43), pages 592-592, August.
    • Handle: RePEc:aes:amfeco:v:43:y:2016:i:18:p:592
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    More about this item

    Keywords

    economic growth; income inequality; Central and Eastern European (CEE) countries; European Union (EU); system Generalized Method of Moments (GMM); disparities; macroeconomics.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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