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The Relationship Among Trade Openness, Financial Development and Economic Growth Indicators and Income Distribution Inequality: Testing the Kuznets, Financial Kuznets, and Stolper-Samuelson Hypotheses

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  • İsmail Hakkı İşcan

    (Bilecik Şeyh Edebali Üniversitesi, İktisadi ve İdari Bilimler Fakültesi, İktisat Bölümü, Bilecik, Türkiye)

  • Tuğba Demirel

    (Bilecik Şeyh Edebali Üniversitesi, Lisansüstü Eğitim Enstitüsü, İktisat Anabilim Dalı, Bilecik, Türkiye)

Abstract

This study investigates the complexities of the Kuznets, Financial Kuznets, and Stolper-Samuelson hypotheses, all of which hold fundamental positions in the literature. The primary objective is to scrutinize the intricate interplay among economic growth, financial development, trade openness, and income distribution inequality across nations and characterized by varying developmental stages. This analytical framework seeks to empirically evaluate the aforementioned hypotheses, specifically within the context of diverse clusters of countries. In this vein, a comprehensive investigation of the nexus connecting economic growth, financial development, trade openness, and income distribution inequality unfolds across a dataset encompassing 19 developing economies and 22 developed counterparts over the 2002-2019 period. The empirical assessment has been accomplished through a panel data analysis. The empirical findings shed light on distinctive patterns in the relationship between the specified economic factors and income inequality for the two distinct groups of countries. These empirical insights strengthen the validity of both the Kuznets and financial Kuznets hypotheses. However, the outcomes also exhibit a nuanced complexion in relation to the Stolper-Samuelson hypothesis. While the empirical underpinning within developed countries aligns with the Stolper-Samuelson premise, the observed outcomes in developing nations diverge from the tenets of the Stolper-Samuelson hypothesis, thereby introducing a layer of complexity to the overall findings.

Suggested Citation

  • İsmail Hakkı İşcan & Tuğba Demirel, 2024. "The Relationship Among Trade Openness, Financial Development and Economic Growth Indicators and Income Distribution Inequality: Testing the Kuznets, Financial Kuznets, and Stolper-Samuelson Hypotheses," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 11(1), pages 1-18, January.
    • Handle: RePEc:ist:iujepr:v:11:y:2024:i:1:p:1-18
    DOI: 10.26650/JEPR1299562
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    References listed on IDEAS

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    More about this item

    Keywords

    Kuznets hypothesis; financial Kuznets hypothesis; income distribution inequality; Stolper-Samuelson hypothesis; panel data analysis JEL Classification : C12 ; C23 ; E10;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General

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