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The Effects of Income Inequality and Redistribution in Democracies: A Dynamic Panel Data Approach

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  • Goksu Aslan

    (University of Messina)

Abstract

In this paper, the simultaneous effects of the inequality and redistribution on economic growth are tested for the whole sample and for a subset of democratic countries, following SYS-GMM estimation on a panel dataset over a period from 1960 to 2010. Overall, net inequality has a negative significant effect on subsequent 5 years for both samples, while redistribution impact is only significant in democracies. The findings are consistent with the fact that governments tend to significantly redistribute more in democracies.

Suggested Citation

  • Goksu Aslan, 2017. "The Effects of Income Inequality and Redistribution in Democracies: A Dynamic Panel Data Approach," Dynamic Econometric Models, Uniwersytet Mikolaja Kopernika, vol. 17, pages 19-39.
    • Handle: RePEc:cpn:umkdem:v:17:y:2017:p:19-39
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    More about this item

    Keywords

    democracy; economic growth; inequality; redistribution;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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