IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2014-01-13.html
   My bibliography  Save this article

The Relationship Between Economic Growth and Income Inequality

Author

Listed:
  • Nasfi Fkili Wahiba

    (ResearchUnit "Enterprise Economy Environment HigherInstitute of management, University of Gabes,Tunisia.)

  • Malek El Weriemmi

    (ResearchUnit "Enterprise Economy Environment HigherInstitute of management, University of Gabes,Tunisia.)

Abstract

The objective of this work is to study the nature of the relationship between income inequality and economic growth in Tunisia. To do this, we started with a review of the literature. Then we conducted an empirical study on the Tunisian case over the period 1984-2011. The main results show that economic growth and openness exchange constituted aggravating factors of inequalities and that these effects are accentuated with the accelerated process of trade liberalization in the country. However, human capital and financial development appears to have contributed to the alleviation of this problem.The second result shows that inequality had a negative effect on economic growth and that this effect appeared more after the acceleration of the process of opening exchange. This result can be explained by the fact that the country has reached an "unbearable" level of inequality. Similarly, it can be explained by the failure of redistribution policies.

Suggested Citation

  • Nasfi Fkili Wahiba & Malek El Weriemmi, 2014. "The Relationship Between Economic Growth and Income Inequality," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 135-143.
  • Handle: RePEc:eco:journ1:2014-01-13
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijefi/article/download/657/pdf
    Download Restriction: no

    File URL: http://www.econjournals.com/index.php/ijefi/article/view/657/pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
    2. Bourguignon, Francois & Verdier, Thierry, 2000. "Oligarchy, democracy, inequality and growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 285-313, August.
    3. Benabou, Roland, 1994. "Human capital, inequality, and growth: A local perspective," European Economic Review, Elsevier, vol. 38(3-4), pages 817-826, April.
    4. Lopez, Humberto, 2006. "Growth and inequality: Are the 1990s different?," Economics Letters, Elsevier, vol. 93(1), pages 18-25, October.
    5. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1989. "Income Distribution, Market Size, and Industrialization," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 537-564.
    6. Bowman, Kirk S., 1997. "Should the Kuznets effect be relied on to induce equalizing growth: Evidence from post-1950 development," World Development, Elsevier, vol. 25(1), pages 127-143, January.
    7. Huw Lloyd-Ellis & Dan Bernhardt, 2000. "Enterprise, Inequality and Economic Development," Review of Economic Studies, Oxford University Press, vol. 67(1), pages 147-168.
    8. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92, National Bureau of Economic Research, Inc.
    9. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    10. Frazer, Garth, 2006. "Inequality and development across and within countries," World Development, Elsevier, vol. 34(9), pages 1459-1481, September.
    11. Randolph, Susan M. & Lott, William F., 1993. "Can the Kuznets effect be relied on to induce equalizing growth?," World Development, Elsevier, vol. 21(5), pages 829-840, May.
    12. Durlauf, Steven N., 1994. "Spillovers, stratification, and inequality," European Economic Review, Elsevier, vol. 38(3-4), pages 836-845, April.
    13. Durlauf, Steven N, 1996. "A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
    14. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    15. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," Review of Economic Studies, Oxford University Press, vol. 64(2), pages 151-172.
    16. Thomas Piketty, 1997. "The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing," Review of Economic Studies, Oxford University Press, vol. 64(2), pages 173-189.
    17. Jerry Cromwell, 1977. "The Size Distribution Of Income: An International Comparison," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 23(3), pages 291-308, September.
    18. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    19. Papanek, Gustav F. & Kyn, Oldrich, 1986. "The effect on income distribution of development, the growth rate and economic strategy," Journal of Development Economics, Elsevier, vol. 23(1), pages 55-65, September.
    20. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    21. Eusufzai, Zaki, 1997. "The Kuznets hypothesis: An indirect test," Economics Letters, Elsevier, vol. 54(1), pages 81-85, January.
    22. Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Görkemli Kazar & Altuð Kazar, 2015. "Is “Harmonious Development” Valid for European Union Regions?," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 954-967.
    2. repec:uii:journl:v:10:y:2018:i:2:p:205-212 is not listed on IDEAS
    3. repec:cbu:jrnlec:y:2017:v:4:p:59-65 is not listed on IDEAS
    4. repec:spr:soinre:v:142:y:2019:i:2:d:10.1007_s11205-018-1940-1 is not listed on IDEAS
    5. Yang, Yiwen & Greaney, Theresa M., 2017. "Economic growth and income inequality in the Asia-Pacific region: A comparative study of China, Japan, South Korea, and the United States," Journal of Asian Economics, Elsevier, vol. 48(C), pages 6-22.
    6. repec:khe:scajes:v:4:y:2018:i:3:p:76-86 is not listed on IDEAS
    7. Adnen Ben Nasr & Mehmet Balcilar & Rangan Gupta & Seyi Saint Akadiri, 2018. "Asymmetric Effects of Inequality on Per Capita Real GDP of the United States," Working Papers 201820, University of Pretoria, Department of Economics.
    8. Adnen Ben Nasr & Mehmet Balcilar & Seyi Saint Akadiri & Rangan Gupta, 2019. "Kuznets Curve for the US: A Reconsideration Using Cosummability," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(2), pages 827-843, April.

    More about this item

    Keywords

    Inequality; growth; liberalization; Tunisia;

    JEL classification:

    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2014-01-13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilhan Ozturk). General contact details of provider: http://www.econjournals.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.