The Relationship between Economic Growth and Income Inequality in Türkiye: A Post-Keynesian Interpretation Based on Kaldor’s Theoretical Perspective

This study investigated the association between economic growth and income distribution based on Kaldor's post-Keynesian theory of income distribution. The focus was on how the functional distribution of income was affected by macroeconomic dynamics and therefore Kaldor’s industry-specific growth laws were not considered in the scope of the study. It was aimed to test if economic growth had an effect on inequality and what were the macroeconomic influence factors on such a relationship. Accordingly, annual data for the period 2006-2022 was used to test the short-run relationship between income inequality (as measured by the Gini coefficient) and a set of key macroeconomic variables like GDP per capita, growth rate, unemployment, inflation, schooling rate, and foreign direct investment. Augmented Dickey-Fuller (ADF) Test, Vector Autoregression (VAR) Model and Granger Causality Test were used for the purposes of analyses. The results indicated that the effect of growth on income inequality was positive in the short run. Nevertheless, it was seen that indirect effects including schooling rate and labor market dynamics were potential mechanisms through which growth could affect distribution. These results were reviewed in the light of Kaldor’s post-Keynesian theory and underscored the importance of complementary socio-economic strategies for achieving inclusive growth..