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How does income distribution affect economic growth? --Evidence from Japanese prefectural data--

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  • Masako Oyama

Abstract

This paper uses Japanese prefectural panel data to analyze how income distribution affects economic growth. In the fixed effects and the GMM estimations, the income share of the third quintile has positive and statistically significant effects on five-year economic growth rates. On the other hand, the Gini indices have positive and statistically significant effects on both of the five-year and ten-year economic growth rates in the fixed effects estimations, and negative effect on the five-year growth rate in the GMM once. These results can be explained with the modified median voter theory.

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  • Masako Oyama, 2014. "How does income distribution affect economic growth? --Evidence from Japanese prefectural data--," ISER Discussion Paper 0910, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:0910
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