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The Impact of COVID-19 on Economic Growth of Countries: What Role Has Income Inequality in It?

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  • Mahieddine Adnan Ghecham

    (Abu Dhabi Campus, Business College, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates)

Abstract

This paper argues that income inequality explains the variation in the economic performance of different countries over the first year of the COVID-19 pandemic. Unlike the conclusions reported by some studies, this study shows that health casualties caused by COVID-19 has had a higher adverse economic impact on countries with lower income inequality. Notwithstanding, the decline in the economic growth as well as the number of casualties caused by COVID-19 are, overall, proportionate to the level of income inequality of the country. Furthermore, the results show that countries with more dependence on the service sector and countries that implemented more restrictive measures (lockdowns) experienced a higher decline in GDP growth over the first year of the pandemic period. The paper concludes with some important policy implications that support the role of strong institutions in making economies resilient over a period of pandemic.

Suggested Citation

  • Mahieddine Adnan Ghecham, 2022. "The Impact of COVID-19 on Economic Growth of Countries: What Role Has Income Inequality in It?," Economies, MDPI, vol. 10(7), pages 1-13, July.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:7:p:158-:d:853963
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    Cited by:

    1. Larissa M. Batrancea & Mehmet Ali Balcı & Ömer Akgüller & Lucian Gaban, 2022. "What Drives Economic Growth across European Countries? A Multimodal Approach," Mathematics, MDPI, vol. 10(19), pages 1-20, October.
    2. Beata Bieszk-Stolorz & Iwona Markowicz, 2022. "The Impact of the COVID-19 Pandemic on the Situation of the Unemployed in Poland. A Study Using Survival Analysis Methods," Sustainability, MDPI, vol. 14(19), pages 1-19, October.
    3. Wei Wan & Jue Wang & Weimin Jiang, 2023. "Does COVID-19 Exacerbate Regional Income Inequality? Evidence from 20 Provinces of China," Sustainability, MDPI, vol. 15(15), pages 1-16, August.
    4. G. A. Petrosyan & I. B. Petrosyan & E. G. Petrosyan, 2023. "Unevenness in the Economic Impact of the COVID-19 Pandemic: The Depth of the Economic Decline in Different Countries and the Factors that Caused It," Studies on Russian Economic Development, Springer, vol. 34(4), pages 554-564, August.

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