Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229401
Authors: 
Bandyopadhyay, Sanghamitra
Sun, Rui
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/177
Abstract: 
Understanding the relationship between income inequality and economic growth is of utmost importance to economists and social scientists. In this paper we use a Bayesian structural vector autoregression approach to estimate the relationship between inequality and growth via growth and inequality shocks for two large economies, China and the USA, for the years 1979- 2018. We find that a growth shock is inequality-increasing, and an inequality shock is growthreducing. We also find, however, that the sizes of the effects of these shocks are very small, accounting for under 2 per cent of the variance for both countries. Finally, we also find that the effects of the shocks dissipate within ten years, suggesting that the effects of these shocks are a short-term phenomenon.
Subjects: 
inequality
growth
Bayesian structural vector autoregression
China
USA
JEL: 
C32
C33
D31
D63
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-934-1
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.