Economic freedom and income inequality: Evidence from a panel of global economies- a linear and a non-linear long-run analysis

Apergis, Nicholas and Cooray, Arusha (2017) Economic freedom and income inequality: Evidence from a panel of global economies- a linear and a non-linear long-run analysis. The Manchester School, 85 (1). pp. 88-105. ISSN 1463-6786

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Official URL: http://dx.doi.org/10.1111/manc.12137

Abstract

This study employs panel data from 138 countries (with unbalanced time frameworks) to investigate the relationship between economic freedom and income inequality. Both linear and non-linear cointegration methodologies are used to identify a long-run equilibrium relationship between: (i) the overall Economic Freedom of the World index and income inequality, and (ii) the major areas of the index and income inequality. The linear long-run parameter estimates document that the association turns out to be negative, while the non-linear long-run parameter estimates illustrate that above a threshold point the association between economic freedom and income inequality is negative, while below this threshold point, the association turns out to be positive. The empirical findings survive a number of robustness tests, such as alternative measures of income inequality.

Item Type: Article
Subjects: L100 Economics
Department: Faculties > Business and Law > Newcastle Business School > Accounting and Finance
Depositing User: Ay Okpokam
Date Deposited: 16 Dec 2015 11:04
Last Modified: 25 Apr 2017 08:53
URI: http://nrl.northumbria.ac.uk/id/eprint/25049

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