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. Manchester School, 85 (1). pp. 88-105.

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View at Publisher Website: https://doi.org/10.1111/manc.12137
 
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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 ID: 69192
Item Type: Article (Research - C1)
ISSN: 1467-9957
Copyright Information: © 2015 The University of Manchester and John Wiley & Sons Ltd
Date Deposited: 13 Jul 2022 23:48
FoR Codes: 38 ECONOMICS > 3801 Applied economics > 380112 Macroeconomics (incl. monetary and fiscal theory) @ 100%
SEO Codes: 15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150206 Income distribution @ 50%
15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150299 Macroeconomics not elsewhere classified @ 50%
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