The impact of economic growth and development on inequality and poverty
DOI:
https://doi.org/10.62012/jegar.v1i1.3Keywords:
Growth, Inequality, Economics .Abstract
This research aims to find out the relationship between inequality and poverty and economic growth and development. This study uses panel data from 158 countries from 1960 to 2010. The results show that the correlation between growth and poverty is consistently negative: a 10 percent drop in the poverty rate is associated with an increase in GDP per capita of 0.5- 1.2% per year. On the other hand, the correlation between growth and inequality is empirically delicate - it can be positive or negative depending on the empirical definitions and the econometric approach used. However, the indirect effect of inequality on economic growth through its correlation with poverty is strongly negative. In this case, the study's results suggest that the high-poor samples' results drive these results.
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