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Relation Between Income Inequality And Economic Growth: Case Study Of Latin America And The Caribbean

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  • Barbora Janubova

    (University of Economics in Bratislava)

Abstract

The aim of the paper is to evaluate the relation between economic growth and income inequality. We briefly analyze the current state of income inequality and economic growth in Latin America and the Caribbean. Subsequently, we examine through the regression analysis whether the income inequality in the region has a negative impact on economic growth and vice versa. We conclude that high income inequality leads to lower economic growth, while economic growth in the more advanced Latin American countries is not based on the accumulation of human capital. Furthermore, GDP growth p.c. reduces income inequality for a group of more developed Latin American economies. In the case of less developed countries, we see a positive effect of GDP p.c. to increase income inequality.

Suggested Citation

  • Barbora Janubova, 2021. "Relation Between Income Inequality And Economic Growth: Case Study Of Latin America And The Caribbean," Medzinarodne vztahy (Journal of International Relations), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 19(1), pages 31-47.
    • Handle: RePEc:brv:journl:v:19:y:2021:i:1:p:31-47
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    More about this item

    Keywords

    Latin America and the Carribean; economic growth; income inequality;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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