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Article

Sima Siami-Namini and Darren Hudson

The purpose of this paper is to explore the effect of growth in different sectors of the economy of developing countries on income inequality and analyze how inflation, as…

Abstract

Purpose

The purpose of this paper is to explore the effect of growth in different sectors of the economy of developing countries on income inequality and analyze how inflation, as a proxy for monetary policy, makes a proportionate contribution for setting a binding national target for reducing income inequality. The paper examines the existence of a linear or nonlinear effect of inflation and sectoral economic growth on income inequality using a balanced panel data of 92 developing countries for the period of 1990–2014.

Design/methodology/approach

Methods section includes several steps as below: first, the functional form of the model using panel data for investigating the contribution of economic sectors in income inequality; second, to estimate the relationship between income inequality and sector growth: testing the Kuznets hypothesis; third, to estimate the relationship between inflation and income inequality base on general functional form of the model proposed by Amornthum (2004); fourth, a panel Granger causality analysis based on a VECM approach.

Findings

The statistically significant finding shows that first agricultural growth and then industrial growth have a dominate impact in reducing income inequality in our sample. But, the service sector growth has positive effects. The results confirm the existence of Kuznets inverted “U” hypothesis for industry growth and Kuznets “U” hypothesis for service sector growth. The findings show that sector growth and inflation affect income inequality in the long-run.

Originality/value

This research is an original paper which analyzes the effect of growth in different sectors of the economy of developing countries (agriculture, manufacturing and services sectors) on income inequality and test the Kuznets hypothesis in terms of sector growth and at the same time, examine the existence of a linear/nonlinear effect of inflation and sectoral economic growth on income inequality and test Granger causality relationship between income inequality and sector growth and inflation.

Details

Journal of Economic Studies, vol. 46 no. 3
Type: Research Article
ISSN: 0144-3585

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Article

Richard L. Brinkman and June E. Brinkman

This paper aims to show the interrelation and relevancy of the concept and theory of cultural lag to social justice. The conception of social justice, though wide in…

Abstract

Purpose

This paper aims to show the interrelation and relevancy of the concept and theory of cultural lag to social justice. The conception of social justice, though wide in scope, is applied in this paper to the limited domain of equality of opportunity and fairness with respect to income distribution.Design/methodology/approach – The methodology of this paper is holistic and interdisciplinary, and interrelates the social and the economic in the overall dynamics of general culture evolution.Findings – The “inverted U‐curve hypothesis” of Simon Kuznets implies that a greater equality of income distribution would be forthcoming in an economy characterized by a mature phase of modern economic growth. Empirical evidence demonstrates that such a movement toward greater equality is subject to question. The American experience of the 1920s and the period from 1973 to the present offers evidence to question the U‐curve hypothesis. Contrary to expectations, during these periods income distribution became more unequal. These periods, indicative of maladjustment, are used to demonstrate and serve as examples of cultural lags. The concept and theory of cultural lag exposes the need for prerequisite institutional adjustment. It consequently appears that the American institutional structure, currently directing the economy toward a policy orientation of laissez‐faire and the resulting increased inequality of income distribution, is anachronistic to a modern industrial society oriented toward the goal of social justice.Originality/value – Relevant to the quest of social justice.

Details

International Journal of Social Economics, vol. 32 no. 3
Type: Research Article
ISSN: 0306-8293

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Article

Kanon Kumar Sen and Md. Thasinul Abedin

Due to large amounts of coal burning, huge carbon dioxide emission and poor environmental quality, it is important to identify whether environmental Kuznets curve exists…

Abstract

Purpose

Due to large amounts of coal burning, huge carbon dioxide emission and poor environmental quality, it is important to identify whether environmental Kuznets curve exists in China and India since in downward period of environmental Kuznets curve, economic growth in these countries will largely contribute to world environmental quality. Further, it helps to make a comparative analysis between China and India on how economic growth will contribute to the environmental quality in both upward and downward period of environmental Kuznets curve due to energy consumption.

Design/methodology/approach

This study uses the data of carbon dioxide emission, per capita GDP and energy consumption from 1972 to 2017 to identify individual and panel-level environmental Kuznets curve of China and India. Before going to regression and causality analysis, unit root and cointegration tests are performed.

Findings

This study finds the existence of environmental Kuznets curve in China and India at both individual and panel level. Further, due to high energy consumption, environmental quality in China will deteriorate at a lower rate in the long run than that of India. Next, the increase in economic growth or per capita GDP in the long run will deteriorate environmental quality at a lower rate in China than that of India. Besides, with the zero level of energy consumption and per capita GDP, the environmental quality of China will be worse than that of India. However, increase in per capita GDP after threshold level will improve environmental quality in India at a higher rate than that of China.

Research limitations/implications

It helps to formalize the comparative relationship between the two large Asian economies by knowing the influence of economic growth on environmental degradation due to energy consumption. However, this study cannot conclude exactly when China and India can avail the downturn in environmental Kuznets curve.

Originality/value

It firstly establishes a link among energy consumption, economic growth and environmental quality between China and India including comparative pace in both upward and downward period of environmental Kuznets curve.

Details

Management of Environmental Quality: An International Journal, vol. 32 no. 2
Type: Research Article
ISSN: 1477-7835

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Article

D.P. Doessel and Abbas Valadkhani

The purpose of this paper is to investigate the relationship between economic development and income distribution for Iran. Using time series data for the period…

Abstract

The purpose of this paper is to investigate the relationship between economic development and income distribution for Iran. Using time series data for the period 1967‐1993, it is found that there is no significant relationship between the Gini coefficient for household expenditure and per capita income. This result means there is no evidence in Iran, for the period analysed here, of there being a U‐relationship between these two variables as suggested by Kuznets. However, the empirical econometric results lend support for the view that institutional or structural variables affect income distribution. This paper has four policy messages for Iranian decision makers. First, income inequality can be reduced by stimulating the goods‐producing sectors of the economy such as agriculture, manufacturing etc. Second, expansion of most of the service sectors, such as trade, real estate etc., in Iran, because of the association in such sectors with rent seeking behaviour, is found to be positively related to inequality. Third, government subsidies and transfers have not decreased income inequality in Iran. On the contrary, the empirical evidence indicates that government transfers have exacerbated inequality. Fourth, government per capita expenditures (current and capital) have played an important role in alleviating relative poverty.

Details

International Journal of Social Economics, vol. 25 no. 2/3/4
Type: Research Article
ISSN: 0306-8293

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Article

Surendra Singh Rajpurohit and Rajesh Sharma

This paper not only aims to validate the environment Kuznets curve concerning five Asian economies but also attempts to analyze the impact of some additional factors like…

Abstract

Purpose

This paper not only aims to validate the environment Kuznets curve concerning five Asian economies but also attempts to analyze the impact of some additional factors like financial development, energy consumption and foreign direct investment (FDI) on carbon emissions.

Design/methodology/approach

This paper applies pooled mean group approach on the variables of a panel of five Asian economies namely India, Pakistan, Bangladesh, Sri Lanka and Malaysia for a period of 35 years from 1980 to 2014.

Findings

This study finds that while moderate economic growth as well as moderate financial development increase carbon emissions, accelerated or exponential economic growth as well as exponential financial development eventually reduce the level of carbon emissions. Energy consumption was found to have a direct and significant relationship with carbon emissions. FDI inflows when analyzed on a stand-alone basis were observed to have an inverse relationship with carbon emissions, while FDI inflows when clubbed with financial development were observed to have a direct relationship with carbon emissions.

Practical implications

The findings of this study, which validate the environmental Kuznets curve, suggest striving for higher economic growth, even if it causes increased carbon emissions to begin with, as the effects on carbon emissions would eventually get reversed when the economic growth accelerates at a higher rate. This study also suggests the appropriate routing of FDI through a mature and developed financial sector to leverage its impact on the environment in a positive way.

Originality/value

To the best of the knowledge of the authors of this paper, there has not been any research carried out so far, which has analyzed the impact of the combination of variables selected for this study concerning the five Asian economies covered in this paper.

Details

Management of Environmental Quality: An International Journal, vol. 32 no. 2
Type: Research Article
ISSN: 1477-7835

Keywords

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Article

Andrew Adewale Alola and Ulrich Tiamgne Donve

In spite of the drive toward environmental sustainability and the attainment of sustainable development goals (SDGs), coal, oil and natural gas energy utilization has…

Abstract

Purpose

In spite of the drive toward environmental sustainability and the attainment of sustainable development goals (SDGs), coal, oil and natural gas energy utilization has remained the Turkey's largest energy mix. In view of this concern, this study examined the role of coal and oil energy utilization in environmental sustainability drive of Turkey from the framework of sustainable development vis-à-vis income expansion over an extended period of 1965–2017.

Design/methodology/approach

In this regard, the authors employ carbon emission as an environmental and dependent variable while the Gross Domestic Product per capita (GDPC), coal and oil energy consumption are the explanatory variables employed in the study.

Findings

The study found that both energy mixes (coal and oil) have a detrimental impact on the environment in both the short and long run, but oil consumption exerts a less severe impact as compared to coal energy. In addition, sustainable development via income growth is not feasible because the income–environmental degradation relationship follows a U-shaped pattern (invalidating the Environmental Kuznets curve, EKC hypothesis) especially when coal and oil remained the major source of lubrication to the economy. At least the EKC hypothesis is unattainable in Turkey as long as the country's major energy mix or primary energy (coal and oil) is in use, thus the application of other socioeconomic, macroeconomic policies might be essential.

Research limitations/implications

Considering the lingering energy challenge associated with Turkey, this novel insight further presented useful policy perspectives to the government and stakeholders in the country's energy sector.

Originality/value

This evidence (the U-shaped relationship) is further ascertained when the aggregate primary energy is employed. Thus, this study provides a novel insight that attaining a sustainable economic growth in Turkey remained a herculean task as long as a more aggressive energy transition approach is not encouraged.

Details

Management of Environmental Quality: An International Journal, vol. 32 no. 3
Type: Research Article
ISSN: 1477-7835

Keywords

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Abstract

Details

African Economic Development
Type: Book
ISBN: 978-1-78743-784-5

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Article

Aviral Kumar Tiwari, Muhammad Shahbaz and Faridul Islam

The purpose of this paper is to investigate the impact of financial development on the rural‐urban income inequality in India using annual data from 1965 to 2008.

Abstract

Purpose

The purpose of this paper is to investigate the impact of financial development on the rural‐urban income inequality in India using annual data from 1965 to 2008.

Design/methodology/approach

The Ng‐Perron unit root test is utilised to check for the order of integration of the variables. The long run relation is examined by implementing the ARDL bounds testing approach to cointegration.

Findings

The results confirm a relation among the variables. Evidence suggest that financial development, economic growth and consumer prices aggravate rural‐urban income inequality in the long run.

Research limitations/implications

The present study offers fresh insights to policy makers on crafting appropriate policies that reduce rural‐urban income inequality in India.

Originality/value

The contribution of this paper is lies in extending the literature in the context of India towards an extensively researched area of rural‐urban divide but in time series framework and utilization of a better approach of time series approach, i.e. ARDL. Specifically, to the best of the authors' knowledge, this is the first empirical study to test poverty‐finance nexus using the basic principles of the GJ hypothesis and provide evidence of short‐ and long‐run dynamics on the postulated relation for India.

Details

International Journal of Social Economics, vol. 40 no. 2
Type: Research Article
ISSN: 0306-8293

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Article

Glenn Firebaugh

One of the striking features of our historical era is the degree of global inequality. In some nations the average person lives on less than $200 per year. In other…

Abstract

One of the striking features of our historical era is the degree of global inequality. In some nations the average person lives on less than $200 per year. In other nations the average income is 100 times larger. Though adjusting for purchasing power parity narrows the gap by about 40 percent (Ram 1979), it is quite evident that the world's $23 trillion annual output is unequally distributed in the extreme.

Details

International Journal of Sociology and Social Policy, vol. 17 no. 11/12
Type: Research Article
ISSN: 0144-333X

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Article

W. Adrián Risso and Edgar J. Sánchez Carrera

The purpose of this paper is to study the long‐run relationship between economic growth and income inequality in China during the pre‐reform (1952‐1978) and post‐reform…

Abstract

Purpose

The purpose of this paper is to study the long‐run relationship between economic growth and income inequality in China during the pre‐reform (1952‐1978) and post‐reform (1979‐2007) periods, this will be done via cointegration analysis.

Design/methodology/approach

The aim of this paper is to offer a proper answer to the issue of the inequality‐growth nexus by using a cointegrated VAR‐setting approach, in this way, the study can cope and avoid the problems of parameter heterogeneneity, omitted variable bias and endogeneity, from which the model of macroeconometric analysis suffers.

Findings

The cointegration analysis shows that, for both periods the relationship is positive and the inequality‐growth elasticity has grown in the second period. In addition, a more robust test of Granger‐causality suggested by Toda and Yamamoto indicates that whereas in the first period there is unidirectional causality from inequality to growth, there is no directional causality in the second period.

Practical implications

The pre‐reform period going from 1952 to 1978 is characterized by the adoption and implementation of a Soviet‐type economy. The economy showed a modest annual economic growth rate of 2.33 percent and very low levels of inequality, with an average Gini coefficient of 0.27. The post‐reform period tried to combine central planning with market‐oriented reforms to increase productivity. In fact, the economy has grown at an annual growth rate of 7.07 percent since 1979 and also the inequality with an average Gini coefficient of 0.33.

Originality/value

The paper studies the relationship between income inequality and economic growth in China during the pre and post reform periods. A significant and positive long‐run relationship between inequality and economic growth in both periods was found. The inequality‐growth elasticity is greater in the post‐reform than the pre‐reform period. Using a more robust Granger causality test the authors find a unidirectional predetermination between the variables for the whole period and for the pre‐reform period. However, there is not causality in the post‐reform period. Except the urban‐rural disparity which explains the unidirectional causality from inequality to growth, pre‐reform China was basically an egalitarian society. In the pre‐reform period, the low inequality was identified as a strain on economic growth. However, the reform period has seen remarkable growth. Although regional inequality and the rural‐urban gap declined from the late 1970s to the mid‐1980s, both have increased rather dramatically since the mid‐1980s.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 5 no. 2
Type: Research Article
ISSN: 1754-4408

Keywords

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