IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpdc/0402005.html
   My bibliography  Save this paper

Inequality and Growth: Does Time Change Anything

Author

Listed:
  • Niko Gobbin

    (Ghent University)

  • Glenn Rayp

    (Ghent University)

Abstract

The econometric analysis of economic growth has always been subject to major flaws and shortcomings. Data scarcity and reliability, parameter heterogeneity, omitted variables bias, endogeneity problems, ... have seriously tainted estimation results. In this paper we propose an alternative framework that explicitly deals with these issues. We investigate the relation between income inequality and economic growth in a number of OECD countries in a cointegrated VAR-setting. Our results suggest that different models seem to hold for different countries. However, for most countries the imperfect markets model better describes reality than the complete markets model.

Suggested Citation

  • Niko Gobbin & Glenn Rayp, 2004. "Inequality and Growth: Does Time Change Anything," Development and Comp Systems 0402005, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0402005
    Note: Type of Document - pdf; prepared on Win2000; pages: 31; figures: Figures in document
    as

    Download full text from publisher

    File URL: http://econwpa.repec.org/eps/dev/papers/0402/0402005.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    2. William A. Brock & Steven N.Durlauf, 2000. "Growth Economics and Reality," NBER Working Papers 8041, National Bureau of Economic Research, Inc.
    3. Sonedda, Daniela, 2003. "Wealth Inequality, Income Redistribution and Growth in 15 OECD countries," Royal Economic Society Annual Conference 2003 190, Royal Economic Society.
    4. Danny Quah, 2000. "Cross Country Growth Comparison: Theory to Empirics," CEP Discussion Papers dp0442, Centre for Economic Performance, LSE.
    5. A. B. Atkinson, 2003. "Income Inequality in OECD Countries: Data and Explanations," CESifo Economic Studies, CESifo, vol. 49(4), pages 479-513.
    6. Fabio Canova, 2004. "Testing for Convergence Clubs in Income Per Capita: A Predictive Density Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 49-77, February.
    7. Rehme, Gunther, 2002. "(Re)Distribution of Personal Incomes, Education and Economic Performance Across Countries," WIDER Working Paper Series 034, World Institute for Development Economic Research (UNU-WIDER).
    8. William Hauk & Romain Wacziarg, 2009. "A Monte Carlo study of growth regressions," Journal of Economic Growth, Springer, vol. 14(2), pages 103-147, June.
    9. Stephen Knowles, 2005. "Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 135-159.
    10. Banerjee, Abhijit V & Duflo, Esther, 2003. "Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-299, September.
    11. Atkinson, A.B. & Brandolini, A., 2000. "Promise and Pitfalls in the Use of 'Secondary' Data -Sets: Income Inequality in OECD Countries," Papers 379, Banca Italia - Servizio di Studi.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. N. Gobbin & G. Rayp, 2004. "Income Inequality Data in Growth Empirics: From Cross-Sections to Time Series," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/252, Ghent University, Faculty of Economics and Business Administration.
    2. Niko Gobbin & Glenn Rayp & Dirk Van de gaer, 2007. "Inequality And Growth: From Micro Theory To Macro Empirics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(4), pages 508-530, September.

    More about this item

    Keywords

    income inequality; economic growth; cointegrated VAR;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpdc:0402005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: http://econwpa.repec.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.