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Income Inequality and Economic Growth Relationship in Bulgaria: An Empirical Analysis

Author

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  • Hristo Mavrov

    (University of Economics - Varna, Bulgaria)

Abstract

The paper examines the long-run relationship between income inequality and economic growth in Bulgaria for the period 1980-2018. Cointegration analysis is used and it is proved that the non-linear relationship between income inequality and economic growth is in the form of an inverted-U curve. The calculated optimal rate of income inequality measured by the Gini index is 29.7. This level of Gini index has been significantly exceeded since 2006 in Bulgaria. The main policy message is that income redistribution can increase GDP per capita, but only if the public sector is reformed.

Suggested Citation

  • Hristo Mavrov, 2022. "Income Inequality and Economic Growth Relationship in Bulgaria: An Empirical Analysis," Scientific Conference of the Department of General Economic Theory, University of Economics - Varna, issue 1, pages 29-37.
    • Handle: RePEc:vrn:oitcon:y:2022:i:1:p:29-37
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    More about this item

    Keywords

    Еconomic growth; GDP per capita; Gini coefficient; Bulgaria; Income inequality;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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