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Inequality in the Income of the Population as a Determinant of the Country's Economic Growth

Author

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  • Tamara Kocurová

    (Department of Statistics and Operation Analysis, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

  • David Hampel

    (Department of Statistics and Operation Analysis, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

Abstract

In this article, there is explored the dependence of economic performance and economic growth on income inequality expressed by Gini coefficient and S80/S20 ratio. Analysis is based on data collected upon EU countries in years 2007, 2012 and 2017. Cluster analysis points out to heterogeneity of EU countries in observed characteristics and enables creation of three groups of countries: post-socialistic, southern and northern. Regression analysis, which takes into account groups of countries, was used to assess and illustrate the dependence. The results show that income inequality has a negative impact on the country's GDP per capita, and its impact on economic growth differs for particular groups of countries.

Suggested Citation

  • Tamara Kocurová & David Hampel, 2020. "Inequality in the Income of the Population as a Determinant of the Country's Economic Growth," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(6), pages 987-994.
    • Handle: RePEc:mup:actaun:actaun_2020068060987
    DOI: 10.11118/actaun202068060987
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    References listed on IDEAS

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    1. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Franto Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    2. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," American Economic Review, American Economic Association, vol. 96(2), pages 200-205, May.
    3. Gründler, Klaus & Scheuermeyer, Philipp, 2018. "Growth effects of inequality and redistribution: What are the transmission channels?," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 293-313.
    4. Ms. Era Dabla-Norris & Ms. Kalpana Kochhar & Mrs. Nujin Suphaphiphat & Mr. Franto Ricka & Ms. Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality: A Global Perspective," IMF Staff Discussion Notes 2015/013, International Monetary Fund.
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