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Top-end inequality and growth: empirical exploration of nonlinearities and the time dimension.
- Source :
- Journal of Economic Inequality; Jun2024, Vol. 22 Issue 2, p311-331, 21p
- Publication Year :
- 2024
-
Abstract
- Using the series of the top 1% income shares in 137 countries, I examine the relationship between top-end inequality and subsequent economic growth from the 1920s to the 2010s. These data enable a versatile exploration of various time horizons. To address concerns regarding chosen functional forms, I employ penalized spline methods to accommodate potential nonlinearities. Empirical findings suggest that the relationship between top-end inequality and subsequent growth is complex, contingent upon both the investigated time horizon and the level of economic development. I find some evidence for a positive link at medium levels of economic development, with this positive link being more pronounced in short- to medium-term associations. I also find that the positive medium-run association weakens as economic development advances. In advanced economies, a negative (or nonpositive) medium- to long-term relationship emerges between the top 1% income share and growth in many settings. Furthermore, I conclude that longer-run associations need to be investigated further. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 15691721
- Volume :
- 22
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Economic Inequality
- Publication Type :
- Academic Journal
- Accession number :
- 177560166
- Full Text :
- https://doi.org/10.1007/s10888-023-09604-7