On testing Kuznets' economic growth hypothesis
Kuznets (1955) hypothesizes that during economic growth, per capita income inequality first increases, reaches a peak and then declines. We test this relationship for 36 less developed countries (LDCs) using a regression model, with quadratic functional form, relating income inequality to income. Estimation using robust errors to correct for heteroscedasticity yields results which support Kuznets's hypothesis. Inequality is greatest at about a level of real GDP (1980 international prices) of US$2000/head.
Volume (Year): 4 (1997)
Issue (Month): 7 ()
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