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Inequality and Economic Growth in China: pre and post-reform periods

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  • W.Adrian Risso

    ()

  • Edgar J. Sanchez Carrera

    ()

Abstract

This paper studies the long-run relationship between economic growth and income inequality in China during the pre- and post-reform periods: 1952-1978 and 1979-2007, respectively. Income inequality is measured by the Gini coe¢ cient and economic growth by real per capita GDP. The cointegration analysis shows that, for both periods the relationship is positive and the inequality-growth elasticity has grown in the second period. In addition, a more robust test of Granger-causality suggested by Toda and Yamamoto (1995) indicates that whereas in the .rst period there is unidirectional causality from inequality to growth, there is no directional causality in the second period.

Suggested Citation

  • W.Adrian Risso & Edgar J. Sanchez Carrera, 2010. "Inequality and Economic Growth in China: pre and post-reform periods," Department of Economics University of Siena 600, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:600
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    Keywords

    Cointegration; Economic Growth; Gini Coe¢ cient.;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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