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The Kuznets U-curve hypothesis: some panel data evidence

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  • Laszlo Matyas
  • Laszlo Konya
  • Lachlan MaCquarie

Abstract

In this paper Kuznet's U-curve hypothesis is tested on two unbalanced panel data sets of 47 and 62 countries, for the period 1970-93, using two-way fixed and random effects models. Several competing model specifications are estimated and the one best fitting the data is selected by appropriate model selection procedures. It is shown that there is no hard empirical evidence to support the usual econometric model formulations and the U-curve hypothesis.

Suggested Citation

  • Laszlo Matyas & Laszlo Konya & Lachlan MaCquarie, 1998. "The Kuznets U-curve hypothesis: some panel data evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 693-697.
    • Handle: RePEc:taf:apeclt:v:5:y:1998:i:11:p:693-697
    DOI: 10.1080/135048598354140
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    1. Rati Ram, 1989. "Level of Development and Income Inequality: An Extension of Kuznets‐Hypothesis to the World Economy," Kyklos, Wiley Blackwell, vol. 42(1), pages 73-88, February.
    2. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    3. Ram, Rati, 1988. "Economic development and income inequality: Further evidence on the U-curve hypothesis," World Development, Elsevier, vol. 16(11), pages 1371-1376, November.
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    Cited by:

    1. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    2. Shahbaz, Muhammad & Kumar Tiwari, Aviral & Nasir, Muhammad, 2013. "The effects of financial development, economic growth, coal consumption and trade openness on CO2 emissions in South Africa," Energy Policy, Elsevier, vol. 61(C), pages 1452-1459.
    3. Mehmet Mercan & Ozlem Azer, 2013. "The Relationship between Economic Growth and Income Distribution in Turkey and the Turkish Republics of Central Asia and Caucasia: Dynamic Panel Data Analysis with Structural Breaks," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(2), pages 165-182, December.
    4. Luis Angeles, 2007. "A proper farewell to Kuznets' hypothesi," Working Papers 2007_15, Business School - Economics, University of Glasgow.
    5. Wannaphong Durongkaveroj, 2024. "Structural transformation and inequality: Does trade openness matter?," The World Economy, Wiley Blackwell, vol. 47(6), pages 2631-2663, June.
    6. İsmail Hakkı İşcan & Tuğba Demirel, 2024. "The Relationship Among Trade Openness, Financial Development and Economic Growth Indicators and Income Distribution Inequality: Testing the Kuznets, Financial Kuznets, and Stolper-Samuelson Hypotheses," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 11(1), pages 1-18, January.
    7. Jalil, Mohammad Muaz, 2009. "Re-examining Kuznets Hypothesis: Does Data Matter?," MPRA Paper 72557, University Library of Munich, Germany.
    8. Takahiro Akita, 2024. "Urbanization and Income Inequality," Working Papers EMS_2024_01, Research Institute, International University of Japan.
    9. Muhammad, Shahbaz & Tiwari, Aviral & Muhammad, Nasir, 2011. "The effects of financial development, economic growth, coal consumption and trade openness on environment performance in South Africa," MPRA Paper 32723, University Library of Munich, Germany, revised 10 Aug 2011.
    10. Atici, Cemal, 2012. "Carbon emissions, trade liberalization, and the Japan–ASEAN interaction: A group-wise examination," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 167-178.
    11. Shahdad Naghshpour, 2005. "The cyclical nature of family income distribution in the united states: An empirical note," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 29(1), pages 138-143, March.
    12. Muhammad Shahbaz & Ijaz Rehman & Nurul Mahdzan, 2014. "Linkages between income inequality, international remittances and economic growth in Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1511-1535, May.
    13. Halkos, George E. & Tsionas, Efthymios G., 2001. "Environmental Kuznets curves: Bayesian evidence from switching regime models," Energy Economics, Elsevier, vol. 23(2), pages 191-210, March.
    14. Juan Antonio Duro, 2008. "Cross-country inequalities in welfare and its decomposition by Sen factors: the virtues of the Theil index," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1041-1045.
    15. Nasir, Muhammad & Ur Rehman, Faiz, 2011. "Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation," Energy Policy, Elsevier, vol. 39(3), pages 1857-1864, March.
    16. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    17. Luis Angeles, 2010. "An alternative test of Kuznets’ hypothesis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 463-473, December.

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    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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