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“Interrelation among Economic Growth, Income Inequality, and Fiscal Performance: Evidence from Anglo-Saxon Countries”

  • Karen Davtyan

    ()

    (Faculty of Economics, University of Barcelona)

The interrelation among economic growth, income inequality, and fiscal performance is very complex. The paper provides the analysis of the interrelations among these variables jointly by the structural VAR methodology, examining also transmission channels among them. This approach allows exploring dynamic interactions among them and feedback effects on each other. The empirical analysis is implemented for the Anglo-Saxon countries, the UK, the USA, and Canada. We find that income inequality has negative effect on economic growth in the case of the UK. The effect is positive in the cases of the USA and Canada. The increase in income inequality worsens fiscal performance for all the countries.

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File URL: http://www.ub.edu/irea/working_papers/2014/201405.pdf
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Paper provided by University of Barcelona, Regional Quantitative Analysis Group in its series AQR Working Papers with number 201403.

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Length: 45 pages
Date of creation: Feb 2014
Date of revision: Feb 2014
Handle: RePEc:aqr:wpaper:201403
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