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Inequality and Economic Growth in China: pre and post-reform periods

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  • W.Adrian Risso

    ()

  • Edgar J. Sanchez Carrera

    ()

Abstract

This paper studies the long-run relationship between economic growth and income inequality in China during the pre- and post-reform periods: 1952-1978 and 1979-2007, respectively. Income inequality is measured by the Gini coe¢ cient and economic growth by real per capita GDP. The cointegration analysis shows that, for both periods the relationship is positive and the inequality-growth elasticity has grown in the second period. In addition, a more robust test of Granger-causality suggested by Toda and Yamamoto (1995) indicates that whereas in the .rst period there is unidirectional causality from inequality to growth, there is no directional causality in the second period.

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Bibliographic Info

Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 600.

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Date of creation: Sep 2010
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Handle: RePEc:usi:wpaper:600

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Keywords: Cointegration; Economic Growth; Gini Coe¢ cient.;

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