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Income Inequality and Growth in Transition Economies: Are Nonlinear Models Needed?

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  • Guanghua Wan

Abstract

This paper analyses the relationship between income inequality and growth in transition economies. The distinct and complex dynamics adherent to these economies lead to the proposition of new econometric models in the paper. However, empirical results do not support the proposed more flexible nonlinear functions. Further, the Kuznets hypothesis is clearly rejected by our data. On the contrary, a (first) half U pattern is found to be adequate for describing the inequality-growth relationship.

Suggested Citation

  • Guanghua Wan, 2002. "Income Inequality and Growth in Transition Economies: Are Nonlinear Models Needed?," WIDER Working Paper Series DP2002-104, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2002-104
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    Cited by:

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    2. García Gámez, Sofía & Vicéns Otero, José, 2006. "Determining factors in the measurement of the sovereign risk in the emerging countries/Factores condicionantes en la medición del riesgo soberano en los países emergentes," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 24, pages 245-272, Abril.
    3. Heshmati, Almas, 2004. "Growth, Inequality and Poverty Relationships," IZA Discussion Papers 1338, Institute of Labor Economics (IZA).
    4. Almas Heshmati, 2006. "Continental And Sub-Continental Income Inequality," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 7-52, January.
    5. Xiaolu Wang, 2006. "Income Inequality in China and its Influencing Factors," WIDER Working Paper Series RP2006-126, World Institute for Development Economic Research (UNU-WIDER).
    6. Muhammad Shahbaz & Faridul Islam & Muhammad Sabihuddin Butt, 2013. "Devaluation and Income Inequality Nexus: Evidence from Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(4), pages 48-58, April.
    7. Li, Kui-Wai, 2012. "Analyzing the Kuznets Relationship using Nonparametric and Semiparametric Methods," MPRA Paper 36535, University Library of Munich, Germany.
    8. Muhammad Shahbaz, 2010. "Income inequality‐economic growth and non‐linearity: a case of Pakistan," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(8), pages 613-636, July.

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