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Cointegration Growth, Poverty and Inequality in Sudan

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  • Hisham Mohamed Hassan Ali

    ()
    (Faculty of Economic and Social Studies, Department of Econometrics and Social Statistics, University of Khartoum, Sudan)

Abstract

This analytical review explores the links between growth, poverty and inequality in Sudan for the period 1956-2003. This paper build upon different models to investigate empirically the relationship between economic growth - as measured by GDP per capita growth- and inequality as measured by Gini coefficient (the growth, inequality and poverty triangle hypotheses), using data from the national and international sources. The paper tries to answer the following questions: i) whether growth, inequality and poverty are cointegrated, ii) whether growth Granger causes inequality, iii) and whether inequality Granger causes poverty. Finally, a VAR is constructed and impulse response functions (IRFs) are employed to investigate the effects of macroeconomic shocks. The results suggest that growth; poverty and inequality are cointegrated when poverty and inequality are the dependent variable, but are not cointegrated when growth is the dependent variable. In the long-run the causality runs from inequality, p verty to growth, and to poverty, while in the short-run causal effects, runs from poverty to growth. Thus, there is unidirectional relationship, running from growth to poverty, both in the long- run and short run.

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Bibliographic Info

Article provided by Weissberg Publishing in its journal Economic Research Guardian.

Volume (Year): 2 (2012)
Issue (Month): 1 (May)
Pages: 70-98

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Handle: RePEc:wei:journl:v:2:y:2012:i:1:p:70-98

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Keywords: Cointgration; Inequality; Poverty; Economic growth; Sudan;

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  1. Sergio Rebelo, 1999. "Long Run Policy Analysis and Long Run Growth," Levine's Working Paper Archive 2114, David K. Levine.
  2. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
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  9. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
  10. Stanley Fischer, 1993. "The Role of Macroeconomic Factors in Growth," NBER Working Papers 4565, National Bureau of Economic Research, Inc.
  11. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  12. Shaohua Chen & Datt, Gaurav & Ravallion, Martin, 1993. "Is poverty increasing in the developing world?," Policy Research Working Paper Series 1146, The World Bank.
  13. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
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