ECONOMIC FREEDOM AND INCOME INEQUALITY REVISITED: EVIDENCE FROM A PANEL ERROR CORRECTION MODEL.

We investigate the causal relationship between income inequality and economic freedom using data from U.S. states over the period 1981 to 2004 within a panel error correction model framework. The results indicate bidirectional causality between income inequality and economic freedom in both the shor...

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Publicado en:Contemporary Economic Policy Vol. 32; no. 1; pp. 67 - 76
Autores principales: APERGIS, NICHOLAS, DINCER, OGUZHAN, PAYNE, JAMES E.
Formato: Artículo
Publicado: Wiley-Blackwell Jan2014
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: ECONOMIC FREEDOM AND INCOME INEQUALITY REVISITED: EVIDENCE FROM A PANEL ERROR CORRECTION MODEL.
      aug:
        au:
          APERGIS, NICHOLAS
          DINCER, OGUZHAN
          PAYNE, JAMES E.
        affil:
          Apergis: Chair and Professor, Department of Banking and Financial Management, University of Piraeus, Piraeus, Attiki 18534, Greece. Phone +3210‐414‐2429, Fax +3210‐414‐2341, E‐mail
          Dincer: Assistant Professor, Department of Economics, Illinois State University, Normal, IL 61790‐4100. Phone 309‐438‐7071, E‐mail
          Payne: Provost and Vice President for Academic Affairs, University of New Orleans, New Orleans, LA 70148. Phone 504‐280‐7199, Fax 504‐280‐6020, E‐mail
      su:
        United States
        Income inequality
        Economic development research
        United States economic policy
        Error correction (Information theory)
        United States economy
      sug:
        subj:
          Income inequality
          Economic development research
          United States
          United States economic policy
          Error correction (Information theory)
          United States economy
      ab: We investigate the causal relationship between income inequality and economic freedom using data from U.S. states over the period 1981 to 2004 within a panel error correction model framework. The results indicate bidirectional causality between income inequality and economic freedom in both the short and the long run. These results suggest that high income inequality may cause states to implement redistributive policies causing economic freedom to decline. As economic freedom declines, income inequality rises even more. In other words, it is quite possible for a state to get caught in a vicious circle of high income inequality and heavy redistribution. (JEL D63, H11 )
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    language: English
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