Economic growth and economic inequality in Visegrád countries: Empirical analysis

Abstract

Since economic inequality represents a burning issue nowadays, the examination of its connection to the dynamics of economic growth is very important. The application of econometric methodology in modeling dependency of economic growth and economic inequality is becoming more and more widespread. In this paper we examine the impact of economic growth on the movement of economic inequality in Visegrad countries in the period from 2005 to 2015, by applying econometric methodology in the area of regression panel model analysis. The results show that the economic growth does not result in reduction of economic inequality. More precisely, an increase of 1% in economic growth leads to the growth of GINI coefficient by 0.19%. In the context of the reduction of economic inequality, policy-makers should pay special attention to socio-democratic factors of inequality, as well as to the tax (redistributive) policy.