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The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market economies as a group for the period 1980–2010. After establishing the existence of simultaneity between the above relationships, a simultaneous panel model has been formulated and estimated incorporating the nonlinearity among the variables as suggested by the existing literature. An inverted U-shape relationship is evident between (1) economic growth, income inequality, and total trade in economic growth equation, (2) income inequality, economic growth, and per capita income in income inequality equation, and (3) total trade and economic growth in total trade equation. Thus, the existence of a two-way nonlinear relationship is highlighted between economic growth, income inequality, and total trade. Apart from these nonlinear relationships, positive and significant effect of (1) gross capital formation, inflation, population growth, human capital, fiscal policy, monetary policy, and domestic credit to private sector on economic growth; (2) civil liabilities on income inequality; (3) gross capital formation and inflation on total trade; (4) total trade, population growth of those aged 65 years and above, political system on fiscal policy is highlighted. Also, negative and significant effect of (1) fiscal policy on income inequality and (2) income inequality on fiscal policy is revealed.

Purpose – Evidence suggests that during the 1990s, many US metropolitan areas saw fundamental changes in the spatial distribution of household income. Following two decades of increasing economic segregation, many metropolitan neighborhoods saw declines in economic segregation, particularly those neighborhoods located within central cities and rural areas. This paper adapts the Spatial Ordering Index proposed by Dawkins (2007b) to explore these trends.

Methodology/Approach – Using US Census data, I calculate economic segregation indices for a sample of 205 US metropolitan areas in 1990 and 2000 and decompose changes in the indices into portions attributable to changes in the spatial distribution of households and portions capturing changes in the spatial distribution of aggregate income. I also examine regional variations in the decompositions.

Findings – The results suggest that changes in the spatial distribution of households and of income each influenced metropolitan economic segregation in different ways during the 1990s. Furthermore, the spatial dynamics of income segregation exhibited significant regional heterogeneity.

Originality/Value of paper – This paper presents a new approach to measuring the dynamics of economic segregation.

Scholars suggest that failure to include implicit taxes in analyses of vertical equity understates the progressivity of the tax system. This paper develops an analytic expression for imputing the implicit tax associated with tax-exempt bonds using the tax-exempt interest income reported on individual income tax returns. To measure progressivity, Kakwani indices are calculated using three definitions of income and three measures of tax liability. In addition, the indices are computed by adding implicit income to the income measure. Examination of the Kakwani indices leads to the conclusion that the tax system is progressive for all measures of tax liability. Total tax (explicit plus implicit), measured against explicit plus implicit income, is more progressive than explicit tax measured against explicit income. Including the implicit tax associated with tax-exempt interest in the measurement of tax progressivity increases the level of progressivity of the tax system slightly.

This chapter provides an approach for teaching the income statement within an earnings quality framework in an intermediate accounting course. Not only is the approach rich in content, but it also is an engaging pedagogical device. The article provides a broad outline and then fills in the details with discussion, information, and examples.

Using decomposable measures of inequality, the implications of household structure are investigated by examining inequality between and within household groups based on the number of exemptions, which correlates with household size, and the filing status, which correlates with the common forms of household structure, i.e. married, single, head of household. Detailed household income data are used to measure income inequality for both pre-tax/transfer and post-tax/transfer definitions of income. These decompositions provide information about the degree of inequality, both before and after taxes and transfers, which is due to household size and filing status. The bootstrap is employed to construct standard errors for the inequality measures and their decompositions, and hypothesis tests are conducted to determine whether the observed changes in the distribution of income are statistically significant.

As hypothesized by Gerschenkron (1962), lower income countries would tend to grow at a faster rate than higher income countries and, as a result, their average incomes would converge in the long run. In addition to that hypothesis, theoretical studies to assess the impact of globalization on international economic convergence remain ambiguous. To address both the issues simultaneously, this study attempts to analyze the trend and possible association between the two, i.e., cross-country per capita income differential and globalization. This study incorporates a long list of countries (160 Countries) for a fairly long period of time (from 1990 to 2019). As expected, the study found a steady rise in global trade to GDP ratio, indicating a rising level of globalization in the assessment period. In addition to that, the study also found a rising level of average cross-country per capita real GDP (based on purchasing power parity (PPP)) differential in the given time horizon, contradicting Gerschenkron hypothesis. Finally, applying the ARDL bounds testing procedure, the study finds that cross-country per capita income differential and globalization are cointegrated; and the net effect of globalization on income differential is positive. Therefore, given the data, the study concludes that, over the years, along with rising level of globalization, per capita income differential diverges which causes cross-country per capita income inequality to rise.

We analyze the food security implications of off-farm labor reallocation decisions of rural farm households in transitional Albania. We accomplish this by examining local and nonlocal off-farm incomes for at-home food consumption expenditures.

An instrumental variable approach is employed to correct for endogeneity and censorship biases of off-farm income variables in a two-stage estimation of the food consumption expenditures.

We find that local off-farm income exerts a positive and significant effect on per capita food consumption expenditures of farm households, while private remittances from nonlocal off-farm income has the opposite effect on food consumption expenditures. In terms of regional heterogeneity, we discover that the mountain region spends significantly less on annual per capita food consumption compared to the central region. This confirms anecdotal evidence that food and nutrition insecurity in rural Albania is predominant in the mountain region.

Our findings suggest the need for policy makers to promote a development agenda that enables farm households to exploit the synergies among the various income-generating activities in the rural economy. This spectrum of income-generating activities forms complex livelihood strategies adopted by rural farm households to improve and maintain their food security.

We distinguish between local and nonlocal sources of off-farm income. Knowing which off-farm income source(s) has the largest impact on household welfare through improved food security status should be of interest to policy makers.

The causal relationship between money and income (output) has been an important topic and has been extensively studied. However, those empirical studies are almost entirely on Granger-causality in the conditional mean. Compared to conditional mean, conditional quantiles give a broader picture of an economy in various scenarios. In this paper, we explore whether forecasting conditional quantiles of output growth can be improved using money growth information. We compare the check loss values of quantile forecasts of output growth with and without using past information on money growth, and assess the statistical significance of the loss-differentials. Using U.S. monthly series of real personal income or industrial production for income and output, and M1 or M2 for money, we find that out-of-sample quantile forecasting for output growth is significantly improved by accounting for past money growth information, particularly in tails of the output growth conditional distribution. On the other hand, money–income Granger-causality in the conditional mean is quite weak and unstable. These empirical findings in this paper have not been observed in the money–income literature. The new results of this paper have an important implication on monetary policy, because they imply that the effectiveness of monetary policy has been under-estimated by merely testing Granger-causality in conditional mean. Money does Granger-cause income more strongly than it has been known and therefore information on money growth can (and should) be more utilized in implementing monetary policy.

We investigate the reasons why income inequality is so high in Spain in the EU context. We first show that the differential in inequality with Germany and other countries is driven by inequality among households who participate in the labor market. Then, we conduct an analysis of different household income aggregates. We also decompose the inter-country gap in inequality into characteristics and coefficients effects using regressions of the Recentered Influence Function for the Gini index. Our results show that the higher inequality observed in Spain is largely associated with lower employment rates, higher incidence of self-employment, lower attained education, as well as the recent increase in the immigration of economically active households. However, the prevalence of extended families in Spain contributes to reducing inequality by diversifying income sources, with retirement pensions playing an important role. Finally, by comparing the situations in 2008 and 2012, we separate the direct effects of the Great Recession on employment and unemployment benefits, from other more permanent factors (such as the weak redistributive effect of taxes and family or housing allowances, or the roles of education and the extended family).

Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers of productive factors? For nearly 150 years, Anglophone distribution theory followed the Ricardian emphasis on functional distribution – the income shares of labor, land, and capital. Only beginning in the 1960s, and consolidated by a research outpouring in the early 1970s, does mainstream economics turn to the personal conception of distribution. This essay documents Anglophone (primarily American) economics’ move from functional to personal distribution, and tries to illuminate something of its causes and timing.