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Income Inequality and Public Debt: What Can Be Learned from the Lebanese Indebtedness?

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  • Adham Sayed

Abstract

This paper examines the impact of domestic public debt on income inequality in Lebanon. The analysis is carried out using the Autoregressive Distributed Lag (ARDL) approach and Error Correction Model (ECM). The data used covers the period between 1990 and 2015. By applying the bounds test, we indicate that there is the existence of a long-run relationship between our variables. Therefore, in both the short and long run, our results show that the domestic share of public debt has a positive and significant effect on income inequality. Hence, a bigger share of domestic public debt leads to wider income inequality. We also suggest steps that may halt the negative impact of public debt on equality in Lebanon, such as reforming the tax system, restructuring the public debt, and searching for sources other than borrowing to cover the budget deficit.

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  • Adham Sayed, 2020. "Income Inequality and Public Debt: What Can Be Learned from the Lebanese Indebtedness?," Business and Economic Research, Macrothink Institute, vol. 10(4), pages 83-106, December.
    • Handle: RePEc:mth:ber888:v:10:y:2020:i:4:p:83-106
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    References listed on IDEAS

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    Cited by:

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    2. Mihai MUTASCU & Nicolae-Bogdan IANC & Albert LESSOUA, 2021. "Public debt and inequality in Sub-Saharan Africa: the case of EMCCA and WAEMU countries," LEO Working Papers / DR LEO 2911, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.

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    More about this item

    Keywords

    Income inequality; Public debt; Domestic public debt; Economic growth; ARDL;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • G01 - Financial Economics - - General - - - Financial Crises
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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