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Income Inequality and the Cost of Recessions

Author

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  • Mostafa Shahee

    (Department of Policy Studies, Queen’s University, Kingston, Ontario, Canada)

  • Glenn P. Jenkins

    (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)

Abstract

This article examines empirically the relationship between the severities of the recessions experienced by countries and their income distributions. The analysis is carried out for 36 countries over a period of 40 years. The empirical evidence from this paper suggests that a greater degree of income inequality increases the cumulative loss of GDP inflicted by recessions. The increase cost emerges from both a longer duration and a deeper amplitude for the contractionary phase of the business cycle.

Suggested Citation

  • Mostafa Shahee & Glenn P. Jenkins, 2016. "Income Inequality and the Cost of Recessions," Development Discussion Papers 2016-03, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:285
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Recession; income inequality; business cycle; income loss;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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