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The Relationship Between Economic Growth and Income Inequality

Author

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  • Nasfi Fkili Wahiba

    (ResearchUnit "Enterprise Economy Environment HigherInstitute of management, University of Gabes,Tunisia.)

  • Malek El Weriemmi

    (ResearchUnit "Enterprise Economy Environment HigherInstitute of management, University of Gabes,Tunisia.)

Abstract

The objective of this work is to study the nature of the relationship between income inequality and economic growth in Tunisia. To do this, we started with a review of the literature. Then we conducted an empirical study on the Tunisian case over the period 1984-2011. The main results show that economic growth and openness exchange constituted aggravating factors of inequalities and that these effects are accentuated with the accelerated process of trade liberalization in the country. However, human capital and financial development appears to have contributed to the alleviation of this problem.The second result shows that inequality had a negative effect on economic growth and that this effect appeared more after the acceleration of the process of opening exchange. This result can be explained by the fact that the country has reached an "unbearable" level of inequality. Similarly, it can be explained by the failure of redistribution policies.

Suggested Citation

  • Nasfi Fkili Wahiba & Malek El Weriemmi, 2014. "The Relationship Between Economic Growth and Income Inequality," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 135-143.
    • Handle: RePEc:eco:journ1:2014-01-13
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    References listed on IDEAS

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    2. G rkemli Kazar & Altu Kazar, 2015. "Is Harmonious Development Valid for European Union Regions?," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 954-967.
    3. Adnen Ben Nasr & Mehmet Balcilar & Rangan Gupta & Seyi Saint Akadiri, 2018. "Asymmetric Effects of Inequality on Per Capita Real GDP of the United States," Working Papers 201820, University of Pretoria, Department of Economics.
    4. Imam Mukhlis & Isnawati Hidayah & Sariyani, 2018. "Economic agglomeration, economic growth and income inequality in regional economies," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 10(2), pages 205-212, Oktober.
    5. T.O. Abiloro & A. Olawole & T.E. Adeniran, 2019. "Corruption, Income Inequality, and Economic Development in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(4), pages 304-319, October.
    6. Adnen Ben Nasr & Mehmet Balcilar & Seyi Saint Akadiri & Rangan Gupta, 2019. "Kuznets Curve for the US: A Reconsideration Using Cosummability," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(2), pages 827-843, April.
    7. Ruijia Wu & Rafael Alvarado & Priscila Méndez & Brayan Tillaguango, 2024. "Impact of Informational and Cultural Globalization, R&D, and Urbanization on Inequality," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1666-1702, March.
    8. Adnen Ben Nasr & Mehmet Balcilar & Rangan Gupta & Seyi Saint Akadiri, 2020. "Asymmetric effects of inequality on real output levels of the United States," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 47-69, March.
    9. Paolo Trucillo & Alessandro Erto, 2023. "Sustainability Indicators for Materials and Processes," Sustainability, MDPI, vol. 15(8), pages 1-16, April.
    10. Mohamed Ali Chroufa & Nouri Chtourou, 2022. "Inequality and Growth in Tunisia: New Evidence from Threshold Regression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 901-924, September.
    11. Lindokuhle Talent Zungu & Lorraine Greyling, 2022. "Exploring the Dynamic Shock of Unconventional Monetary Policy Channels on Income Inequality: A Panel VAR Approach," Social Sciences, MDPI, vol. 11(8), pages 1-22, August.
    12. Duc Hong Vo & Thang Cong Nguyen & Ngoc Phu Tran & Anh The Vo, 2019. "What Factors Affect Income Inequality and Economic Growth in Middle-Income Countries?," JRFM, MDPI, vol. 12(1), pages 1-12, March.
    13. Claudia Andreea Urean, 2017. "The Impact Of Income Inequality And Educational Inequality On Economic Growth - A Literarure Review," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 59-65, August.
    14. Hasna Khemili & Mounir Belloumi, 2018. "Cointegration Relationship between Growth, Inequality and Poverty In Tunisia," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 2(1), pages 8-18.
    15. Seyi Saint Akadiri & Ada Chigozie Akadiri, 2018. "Growth and Inequality in Africa: Reconsideration," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(3), pages 76-86, September.
    16. Yang, Yiwen & Greaney, Theresa M., 2017. "Economic growth and income inequality in the Asia-Pacific region: A comparative study of China, Japan, South Korea, and the United States," Journal of Asian Economics, Elsevier, vol. 48(C), pages 6-22.
    17. Kemal ERKİŞİ & Turgay CEYHAN, 2020. "The Relationship Between Economic Growth and Income Inequality: A Panel Data Analysis," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(43).

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    More about this item

    Keywords

    Inequality; growth; liberalization; Tunisia;
    All these keywords.

    JEL classification:

    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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