Interrelation among Economic Growth, Income Inequality, and Fiscal Performance: Evidence from Anglo-Saxon Countries Articles uri icon

authors

  • DAVTYAN, KAREN

publication date

  • February 2016

start page

  • 37

end page

  • 66

issue

  • 217

International Standard Serial Number (ISSN)

  • 0210-1173

Electronic International Standard Serial Number (EISSN)

  • 2386-4176

abstract

  • The interrelation among economic growth, income inequality, and fiscal performance is very complex. The objective of this paper is to analyze the dynamic interrelations among these variables using structural VAR models and to examine transmission channels among them. The empirical analysis is implemented for the UK, the USA, and Canada, using the longest possible consistently measured comparable data on income inequality. The obtained results show that inequality has a negative effect on growth in the case of the UK while the effect is positive for the USA and Canada. An increase in inequality worsens fiscal performance for all the considered countries.

subjects

  • Statistics

keywords

  • economic growth; income inequality; fiscal performance; var