Income Inequality, Fiscal Policy Volatility and Economic Growth
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| Title | Income Inequality, Fiscal Policy Volatility and Economic Growth
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| Author | Wang Liyong, Ouyang Lihui and Fan Yazhou |
| Organization | Central University of Finance and Economics |
| Email | liyongecon@gmail.com；ouyangcass@163.com；yzperfect@gmail.com |
| Key Words | Income inequality; Fiscal policy; Volatility; Economic growth |
| Abstract | The paper analyzes a new influential channel of income inequality on economic growth, that is the fiscal policy volatility channel, with methods of BP filter, Spline regression and GMM. The results show that the effect of income inequality on fiscal policy volatility is significantly positive, the effect of fiscal policy volatility on economic growth is significantly negative, Which means that the fiscal policy volatility channel can really provide explanations for the negative effects of income inequality on economic growth. Some explanations about such relationship are given in this paper. The results also show that some factor, such as real GDP per capita, government size, economic openness, have negative effects on fiscal policy volatility. Such factors as human capital, market degree and investment have positive effects on economic growth, while the effect of population growth on economic growth is negative. |
| Serial Number | WP353 |
| Time | 2012-08-31 |
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