Article ID Journal Published Year Pages File Type
968129 Journal of Policy Modeling 2009 18 Pages PDF
Abstract

A pilot empirical study is carried out on how income inequality affects growth through incorporating panel data information into a quarterly macro-econometric model of China. Provincial urban and rural household data are used to construct income inequality measures, which are then used to augment household consumption equations in the model. Model simulations test the inequality effect on GDP growth and its components. Results show that income inequality forms robust explanatory variables of consumption and that the way inequality develops carries negative consequences on GDP and sectoral growth.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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