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A Note On The Differential Regional Effects Of Income Inequality: Empirical Evidence Using U.S. County-Level Data

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  • Bebonchu Atems

Abstract

type="main"> This note examines the correlation between income inequality and economic growth using a panel of income distribution data for 3,109 counties of the U.S. Using the System Generalized Method of Moments (GMM) approach, we find that for the entire sample of 3,109 counties, an increase in a county's level of inequality has a significant negative relationship with future economic growth. In reality, however, the magnitude, sign, and significance of this relationship is not necessarily uniform across all regions of the U.S., motivating the need to examine regional differentials in the relationship between inequality and growth. Consequently, we split our dataset into metropolitan and nonmetropolitan counties, into the eight Bureau of Economic Analysis regions, and into regions of different political affiliation and economic-dependence typology. Our results show considerable heterogeneity in the relationship between inequality and growth across these regions.

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  • Bebonchu Atems, 2013. "A Note On The Differential Regional Effects Of Income Inequality: Empirical Evidence Using U.S. County-Level Data," Journal of Regional Science, Wiley Blackwell, vol. 53(4), pages 656-671, October.
    • Handle: RePEc:bla:jregsc:v:53:y:2013:i:4:p:656-671
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    1. Nikos Benos & Stelios Karagiannis, 2018. "Inequality And Growth In The United States: Why Physical And Human Capital Matter," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 572-619, January.
    2. Up Lim & Donghyun Kim, 2015. "Toward Sustainable Economic Growth: A Spatial Panel Data Analysis of Regional Income Convergence in US BEA Economic Areas," Sustainability, MDPI, vol. 7(8), pages 1-17, July.
    3. Goetz, Stephen & Partridge, Mark & Stephens, Heather, 2017. "The Economic Status of Rural America in the Trump Era," MPRA Paper 77830, University Library of Munich, Germany.
    4. Atems, Bebonchu, 2018. "Regional heterogeneity in the relationship between inequality and growth: Evidence from panel vector autoregressions," The Journal of Economic Asymmetries, Elsevier, vol. 17(C), pages 41-47.
    5. Bebonchu Atems & Grayden Shand, 2018. "An empirical analysis of the relationship between entrepreneurship and income inequality," Small Business Economics, Springer, vol. 51(4), pages 905-922, December.

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