Income inequality in the OECD area: On measuring its possible effects on economic growth

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Siiteri, Martti 2015-11-04T13:21:08Z 2015-11-04T13:21:08Z 2015
dc.description.abstract This thesis studies possible effects income inequality might have on economic growth and examines whether it is reasonable to measure these effects in detail with the tools provided by growth econometrics. Recently published research indicates a strong negative effect of net income inequality on growth and this thesis assesses whether these findings can be considered reliable and significant. This objective is accomplished by inspecting recent literature concerning the subject with a detailed emphasis on a particular OECD working paper stating a robust negative effect of net income inequality on growth. Said working paper, Cingano (2014), is constructed on the MRW augmented Solow model, which is introduced and assessed. Moreover, the estimation model and method as well as the data sets used in Cingano (2014) are examined in detail. Furthermore, development of income inequality in the OECD area in recent decades and theoretical channels through which income inequality might affect growth are introduced and discussed. This thesis finds that overly specific conclusions about the strength of the estimated effects should not be made based on growth regressions on the subject. This conclusion is reached because the estimates often lack sufficient data and there are problems concerning the estimation models and methods. This thesis finds considerable difficulties concerning Cingano (2014) that are also linked to other literature addressing the effects of income inequality on growth in general. Based on the findings in this thesis, it seems unreasonable to interpret the findings of the literature in such a detailed manner as they are expressed. However, this thesis does not suggest that the subject and research about it lacks importance, but suggests that the focus ought to be directed to micro-level data and channels where genuine progress could be accomplished. en
dc.format.extent 70
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Income inequality in the OECD area: On measuring its possible effects on economic growth en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Taloustieteen laitos fi
dc.contributor.department Department of Economics en
dc.subject.keyword income inequality
dc.subject.keyword net income inequality
dc.subject.keyword disposable income inequality
dc.subject.keyword income distribution
dc.subject.keyword economic growth
dc.subject.keyword effects of inequality on growth
dc.subject.keyword OECD
dc.subject.keyword Gini coefficient
dc.subject.keyword augmented Solow model
dc.subject.keyword human capital
dc.subject.keyword physical capital
dc.subject.keyword system GMM
dc.subject.keyword growth econometrics
dc.subject.keyword MRW
dc.subject.keyword Cingano (2014)
dc.subject.keyword redistribution
dc.identifier.urn URN:NBN:fi:aalto-201511054908
dc.type.dcmitype text en
dc.programme.major Economics en
dc.programme.major Kansantaloustiede fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon taloustieteet
dc.subject.helecon economic science
dc.subject.helecon tulonjako
dc.subject.helecon income distribution
dc.subject.helecon tasa-arvo
dc.subject.helecon equality
dc.subject.helecon taloudellinen kasvu
dc.subject.helecon economic growth
dc.ethesisid 14011 2015-06-01
dc.location P1 I

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