- Title
- Income inequality and economic growth in BRICS: insights from non-parametric techniques
- Creator
- Acheampong, Alex O.; Adebayo, Tomiwa Sunday; Dzator, Janet; Koomson, Isaac
- Relation
- Journal of Economic Inequality Vol. 21, p. 619-640
- Publisher Link
- http://dx.doi.org/10.1007/s10888-023-09567-9
- Publisher
- Springer
- Resource Type
- journal article
- Date
- 2023
- Description
- The income inequality-economic growth linkage is a topical issue in economics and policy discussions. Both theoretical and empirical results on the impact of income inequality on economic growth have been controversial. One of the criticisms of the existing studies relates to using cross-sectional data and linear estimation techniques for empirical analysis. Capitalising on the limitations in the existing literature, this article employs the novel Quantile-on-Quantile Regression (QQR) approach to examine the relationship between income inequality and economic growth in BRICS. Applying the novel QQR technique helps to model how income inequality distributions affect the distributions of economic growth. The quantile cointegration tests reveal cointegration between income inequality and economic growth. The QQR results indicate that income inequality has a stronger negative effect on the lower and middle tails of economic growth in Brazil while having a stronger positive impact on economic growth in Russia, China and South Africa. For India, income inequality has a stronger negative effect on the lower tail of economic growth and a stronger positive impact on the middle and higher tails of economic growth. These results are consistent with quantile regression results. Further analysis from the Granger causality-in-quantiles shows that at various quantiles, a bidirectional causal relationship between income inequality and economic growth exists in China, while a unidirectional causality runs from income inequality to economic growth in Brazil and India. No causal relationship was found between income inequality and economic growth in Russia and South Africa. The policy implications are discussed.
- Subject
- BRICS; inequality; economic growth; non-parametric techniques; SDG 1; SDG 8; SDG 10; SDG 17; Sustainable Development Goals
- Identifier
- http://hdl.handle.net/1959.13/1499405
- Identifier
- uon:54673
- Identifier
- ISSN:1569-1721
- Rights
- This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
- Language
- eng
- Full Text
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Goal 10: Reduced Inequalities
Goal 8: Decent Work and Economic Growth
Goal 1: No Poverty
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