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Assessing the Impact of Income Redistribution on Growth: Evidence From the E6 Countries

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  • Emre Gökçeli

    (Kütahya Dumlupınar University)

Abstract

This study examines the effect of income distribution on economic growth across the E6 countries, namely China, Türkiye, Mexico, Brazil, Russia, and India, from 1988 to 2021, employing the Panel Corrected Standard Errors (PCSE) method. The findings, based on the PCSE estimations and preliminary tests including cross-sectional dependence, unit root tests, and the Westerlund cointegration test, can be summarized as follows: i) Models exhibit cross-sectional dependence (CSD) according to various CD tests. ii) There is a long-term relationship among the variables according to the Westerlund cointegration test. iii) The growth-enhancing effect of absolute redistribution on the economic growth rate has been observed. iv) The growth-promoting effect of absolute redistribution is also confirmed through the use of the relative redistribution variable. v) Based on these findings, the study offers policy recommendations and outlines directions for future research on the topic.

Suggested Citation

  • Emre Gökçeli, 2025. "Assessing the Impact of Income Redistribution on Growth: Evidence From the E6 Countries," Journal of Finance Letters (Maliye ve Finans Yazıları), Maliye ve Finans Yazıları Yayıncılık Ltd. Şti., vol. 40(124), pages 60-80, October.
    • Handle: RePEc:acc:malfin:v:40:y:2025:i:124:p:60-80
    DOI: https://doi.org/10.33203/mfy.1689247
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    Keywords

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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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