Volume 16, Issue 2 (2016)
QJER 2016, 16(2): 155-172 |
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Khalesi G, Piraee K. The Relationship between Economic Growth and Income Inequality in Iran’s Provinces. QJER 2016; 16 (2) :155-172
URL: http://ecor.modares.ac.ir/article-18-9675-en.html
URL: http://ecor.modares.ac.ir/article-18-9675-en.html
1- MA Student of Economic science, Azad University of Shiraz
2- Associate Professor of Economics, Azad University of Shiraz
2- Associate Professor of Economics, Azad University of Shiraz
Abstract: (7561 Views)
One of the fundamental problems in regional economic development is determining the ways in which government can allocate resources of society so that economic growth and income equality among provinces can be achieved simultaneously. In this study, a Vector Auto Regressive Model is estimated using seasonal data during Q1: 2000- Q4:2009. Inter-provincial income inequality is obtained with both Gini Coefficient and Theil Index. The results show that, in short run, income inequality among provinces accelerates economic growth and in long run decelerates it, however, it does not return to its initial level. Economic growth in short run accelerates income inequality among provinces, but decelerates it in long run. Robustness tests with Theil Index, confirm our primary results applying Gini Coefficient.
Keywords: economic growth, Income inequality, Gini coefficient, Theil Index, Vector Auto Regressive Model
Received: 2013/10/17 | Revised: 2016/08/15 | Accepted: 2014/05/21 | Published: 2016/07/22
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