wl-7916-Relationship between Income Inequality and Economic Growth: Re-examination

The present paper examines the relationship between income inequality and economic growth using data on Gini index and GDP per capita growth of different countries in aggregate as well as based on their income levels that is high and low & middle income separately, over quite a long period of 31 years from 1991 to 2022. Findings revealed a positive and significant relationship between them overall and opposite relationship for high and lower-middle income countries. This implied that levels of inequality within countries when studied in aggregate tends to overpower the negative impact overall and therefore should be studied separately based on level of income. We have used different statistical techniques such as pooled ordinary least squares, fixed effects, random effects and GMM to estimate these relationships.. Findings further revealed vital role of education on economic growth.