Please use this identifier to cite or link to this item:
http://hdl.handle.net/123456789/6214
Title: | Relationship between Income Inequality and Economic Growth in Ethiopia |
Other Titles: | Vol. 10, No. 1 |
Authors: | Girma, Tigist Shete, Maru |
Keywords: | Economic Growth, Income Inequality, ARDL, ECM, Ethiopia. |
Issue Date: | 2018 |
Publisher: | St. Mary's University |
Abstract: | The objective of this study is to investigate the relationship between income
inequality and economic growth in Ethiopia. The study hypothesized the
existence of long -run and short -run relationship between income inequality
and economic growth. It used time series data for 2002 to 2017 and employed
Auto Regressive Distributed Lag Model (ARDL) in a time series econometric
framework. In the long-run co-integration analysis economic growth is found
to be statistically significant, and if income inequality is increased by one
percent, real GDP will grow by 13.8 percent. In the short-run, the error
correction model was found to be statistically significant at 5% significance
level with a negative sign implying that the error correction procedure
converged monotonically to the equilibrium path relatively quickly and high
significance of ECM (-1) is evidence to the existence of established stable
long-run relationship between the variables. The positive relationship
between income inequality and economic growth indicates that high income
inequality followed the Kuznets hypothesis since Ethiopia is a low income
country. |
URI: | http://hdl.handle.net/123456789/6214 |
Appears in Collections: | Journal of Business and Administrative Studies (JBAS)
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