IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v47y2008i4p727-743.html
   My bibliography  Save this article

Economic Growth and Income Inequality Relationship: Role of Credit Market Imperfection

Author

Listed:
  • Amina Tabassum

    (Economics Department, Quaid-i-Azam university, Islamabad.)

  • M. Tariq Majeed

    (Economics Department, Quaid-i-Azam university, Islamabad.)

Abstract

This paper examines the empirical relationship between economic growth and income inequality both at aggregate and regional level using more comparable data set for 69 developing countries over the period 1965-2003. The study identifies credit market imperfection in low-income developing countries as the likely reason for a strong negative relationship between income inequality and economic growth. While in short run the relationship between growth and income inequality might be positive but over time more income inequalities reduces economic growth. Moreover, this paper finds evidence that more physical and human capital investment, openness to trade and higher government spending have statistically significant impact on enhancing economic growth and reducing inequality.

Suggested Citation

  • Amina Tabassum & M. Tariq Majeed, 2008. "Economic Growth and Income Inequality Relationship: Role of Credit Market Imperfection," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 727-743.
    • Handle: RePEc:pid:journl:v:47:y:2008:i:4:p:727-743
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2008/Volume4/727-743.pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Majeed, M Tariq, 2011. "Trade, Poverty and Employment: Empirical Evidence from Pakistan," MPRA Paper 45077, University Library of Munich, Germany.
    2. Prashant Kumar Choudhary & Priyanka Saharia, 2023. "Global income inequality and measuring values with the world values survey," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 25(1), pages 103-122, June.
    3. Burz Razvan & Bogdan Ion Boldea, 2012. "Sustainability Of Economic Growth And Inequality In Incomes Distribution," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 249-254, July.
    4. Bántó Norbert, 2012. "Forms Of Cross-Border Tourist Co-Operation In The Bihor-Hajdú-Bihar Euroregion," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 229-235, July.
    5. Nazifi Abdullahi Darma & Muhammad Ali, 2014. "An Empirical Analysis of the Effect of Income Inequality on Economic Growth in West Africa," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(4), pages 221-231.
    6. Ghulam MOHEY-UD-DIN* & Muhammad Wasif SIDDIQI**, 2017. "GDP FLUCTUATIONS AND LONG-RUN ECONOMIC GROWTH: A Study of Selected South Asian Countries," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(1), pages 41-66.

    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:pid:journl:v:47:y:2008:i:4:p:727-743. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.