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Long-Run Relatıonshıp between Economıc Freedom and Income Inequalıty: Evidence from G-7 Countrıes

Year 2020, Volume: 34 Issue: 2, 371 - 392, 13.04.2020
https://doi.org/10.16951/atauniiibd.542690

Abstract

References

  • Acemoglu, D. (2003). Paterns of Skill Premia, Review Economic Studies, Volume 39 (4), 199-230
  • Ahmad, M. (2017) Economic Freedom and Income Inequality: Does Political Regime Matter?, Economies, 5, 18, doi:10.3390/economies5020018
  • Alvaredo, F., Chancel, L., Piketty, T., Saez, E., Zuckman, G. (20218). World Inequality Report 2018
  • Apergis N. (2015) Economic Freedom and Income Inequality Further Evidence from 58 Countries in the Long-Run, Financial Theory and Practice, 39(4) 349-370
  • Apergis, N. And Cooray, A. (2017) Economıc Freedom And Income Inequalıty: Evıdence From A Panel Of Global Economıes: A Lınear And A Non-Lınear Long-Run Analysıs, The Manchester School Vol 85 No. 1 88–105
  • Ashby, N. J., and Sobel R.S (2008). “Income Inequality and Economic Freedom in the U.S. States.” Public Choice 134: 329–346.
  • Author, D.H, Manning, E., Smith, C.L (2016). The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment, American Economic Journal: Applied Economics 2016, 8(1): 58–99
  • Baltagi, Badi H. (2005), Econometric Analysis of Panel Data, Third Edition, John Wiley&Sons Ltd., England.
  • Barro, R. J. (2000). Inequality and Growth in a Panel of Countries, Journal of Economic Growth, Vol. 5, No. 1, pp. 5-32
  • Bennett, D., and Nikolaev, B. (2014). On the Ambiguous Economic Freedom-Inequality Relationship, Empir Econ, 53:717–754, DOI 10.1007/s00181-016-1131-3
  • Bennett, D., and Vedder, D. (2013). A Dynamic Analysis of Economic Freedom and Income Inequality in the 50 US States: Empirical Evidence of a Parabolic Relationship. Journal of Regional Analysis & Policy, 43(1), 42–55.
  • Berggren, N. (1999). “Economic Freedom and Equality: Friends or Foes?” Public Choice 100:203–223
  • Bergh, A., and Nilsson, T. (2010). “Do Liberalization and Globalization Increase Income Inequality?” European Journal of Political Economy 26 (4): 488–505.
  • Blackburne, E. F., and Frank M.W (2007). Estimations of Nonstationary Heterogeneous Panels, The Stata Journal, Vol.7, No.2, 197-208
  • Carter, J. And Lawson, R. (2006). “An Empirical Note on Economic Freedom and Income Inequality.” Public Choice, Vol. 130, No. 1/2 (Jan., 2007), pp. 163-17
  • Clark, J., and Lawson, R. (2008). The Impact of Economic Growth, Tax Policy and Economic Freedom on Income Inequality, Journal of Private Enterprise 24: 23-31.
  • de Haan, Y. J.E., Sturm (2017). Finance and Income Inequality: AReview and New Evidence European Journal of Political Economy, Volume 50, 171-195
  • Engerman, S. L., and Sokoloff, K.L (2002). Factor Endowment, Inequality and Paths of Development Among New World Economies. Economia 3: 41-109.
  • Goldberg P.K. and Pavcnik N. (2007). DistributionalEffects of Globalization in DevelopingCountries, Journal of EconomicLiteratureVol. XLV (March 2007), pp. 39–82
  • Graafland, J.,and Lous, B. (2017). Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries, J Happiness Stud (2018) 19:2071–2093
  • Gwartney, J., Lawson, R., Hall, J., Murphy, R. (2018). Economic Freedom of the World: 2018 Annual Report, Fraser Institute
  • Gwartney, J.D., Lawson, R., Block,W. (1996). Economic freedom of the world: 1975–1995. Vancouver, BC: The Fraser Institute.
  • Im, K.S, Pesaran, M.H, Shin,Y. (2003). Testing for Unit Roots in Heterogeneous Panels, Journal of Econometrics 115 (2003) 53 – 74
  • International Monetary Fund (2007). GlobalizationandPoverty, World Economic Outlook, October, (Washington)
  • Jaumotte, F., Lall, S., Papageorgiout, C.(2013). RisingIncomeInequality: Technology or Tradeand Financial Globalization, IMF EconomicReviewVol. 61, No. 2, pp. 273-307
  • Levin, A.,Lin, C.F., Chu, C-S.J, (2002) “Unit RootTests in Panel Data: Asymptotic and Finite Sample Properties”. Journal of Econometrics, 108, 1-22.
  • Lin, C., and Yun, M.S (2016). The Effects of the Minimum Wage on Earnings Inequality: Evidence from China, IZA DP No. 9715
  • Litwin, B.S. (2015). Determining the Effect of the Minimum Wage on Income Inequality, Student Publications. 300. https://cupola.gettysburg.edu/student_scholarship/300
  • Milanoviç, B. (2005). Can WeDiscerntheEffect of Globalization on Income Distribution? EvidencefromHouseholdSurveys, The World Bank EconomıcRevıew,Vol. 19, No. 1, pp. 21–44
  • Pedroni, P. (2004), Panel Cointegration: ASymptoticandFiniteSampleProperties of Pooled Time SeriesTestswith an Applicationtothe PPP Hypothesis. EconometricTheory, 20, 597-625.
  • Pesaran, M. H., Shin, Y., Smith, R.P. (1999). Pooled Mean Group Estimation of Dynamic Heterogeneous Panels. Journal of theAmerican Statistical Association, 94(446), 621-634.
  • Salvador, P.M, and Angulo-Guerrero, M.A (2016) Does EconomicFreedom Increase Income Inequality? Evidence from the EU Countries, Journal of Economic Policy Reform, 19:4, 327-347
  • Scully, G. W. (2002). Economic Freedom, Government Policy and the Trade-off between Equity and Economic Growth, Public Choice 113 (1–2): 77–96.
  • Scully, G.W. (1992). Constitutional Environments and Economic Growth. Princeton: Princeton University Press
  • Solt, Frederick. 2016. "The Standardized World Income Inequality Database." Social Science Quarterly 97(5):1267-1281. SWIID Version 7.1, August 2018. (2018-08-14)
  • Stiglitz E. J. (2012). ThePrice of Inequality: How Today’s Divided Sosiety Endangers Our Future, W.W. Norton&Company, New York London
  • Stolper, W.F., and Samuelson P.A (1941). Protectionand Real Wages, TheReview of EconomicStudies, Vol. 9, No. 1 (Nov., 1941), pp. 58-73

Ekonomik Özgürlük ve Gelir Eşitsizliği Arasındaki Uzun Dönemli İlişki: G-7 Ülkelerinden Kanıtlar

Year 2020, Volume: 34 Issue: 2, 371 - 392, 13.04.2020
https://doi.org/10.16951/atauniiibd.542690

Abstract

Abstract: This paper examines the long run relationship between
economic freedoms and income inequality in G-7[1]
countries overthe2000 – 2015period. The World Economic Freedom Index (EFW) that
created by the Fraser Institute is one of the methods of measuring economic
freedoms in a country. The EFW consists of five sub-indices: size of the
government, legal system and property rights, sound money, freedom to trade
internationaly and regulations. According to the results of this study, EFW
increases income inequality in G-7 countries. However, all of the areas of
economic freedom do not affect income inequality in the same direction. While
freedoms in government size and legal system areas has increased the income
inequality; freedoms in free trade to internationally, sound money and
regulation areas reduce income inequality.







[1] United
States, Canada, United Kingdoom, Germany, France, Japan, Italy





References

  • Acemoglu, D. (2003). Paterns of Skill Premia, Review Economic Studies, Volume 39 (4), 199-230
  • Ahmad, M. (2017) Economic Freedom and Income Inequality: Does Political Regime Matter?, Economies, 5, 18, doi:10.3390/economies5020018
  • Alvaredo, F., Chancel, L., Piketty, T., Saez, E., Zuckman, G. (20218). World Inequality Report 2018
  • Apergis N. (2015) Economic Freedom and Income Inequality Further Evidence from 58 Countries in the Long-Run, Financial Theory and Practice, 39(4) 349-370
  • Apergis, N. And Cooray, A. (2017) Economıc Freedom And Income Inequalıty: Evıdence From A Panel Of Global Economıes: A Lınear And A Non-Lınear Long-Run Analysıs, The Manchester School Vol 85 No. 1 88–105
  • Ashby, N. J., and Sobel R.S (2008). “Income Inequality and Economic Freedom in the U.S. States.” Public Choice 134: 329–346.
  • Author, D.H, Manning, E., Smith, C.L (2016). The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment, American Economic Journal: Applied Economics 2016, 8(1): 58–99
  • Baltagi, Badi H. (2005), Econometric Analysis of Panel Data, Third Edition, John Wiley&Sons Ltd., England.
  • Barro, R. J. (2000). Inequality and Growth in a Panel of Countries, Journal of Economic Growth, Vol. 5, No. 1, pp. 5-32
  • Bennett, D., and Nikolaev, B. (2014). On the Ambiguous Economic Freedom-Inequality Relationship, Empir Econ, 53:717–754, DOI 10.1007/s00181-016-1131-3
  • Bennett, D., and Vedder, D. (2013). A Dynamic Analysis of Economic Freedom and Income Inequality in the 50 US States: Empirical Evidence of a Parabolic Relationship. Journal of Regional Analysis & Policy, 43(1), 42–55.
  • Berggren, N. (1999). “Economic Freedom and Equality: Friends or Foes?” Public Choice 100:203–223
  • Bergh, A., and Nilsson, T. (2010). “Do Liberalization and Globalization Increase Income Inequality?” European Journal of Political Economy 26 (4): 488–505.
  • Blackburne, E. F., and Frank M.W (2007). Estimations of Nonstationary Heterogeneous Panels, The Stata Journal, Vol.7, No.2, 197-208
  • Carter, J. And Lawson, R. (2006). “An Empirical Note on Economic Freedom and Income Inequality.” Public Choice, Vol. 130, No. 1/2 (Jan., 2007), pp. 163-17
  • Clark, J., and Lawson, R. (2008). The Impact of Economic Growth, Tax Policy and Economic Freedom on Income Inequality, Journal of Private Enterprise 24: 23-31.
  • de Haan, Y. J.E., Sturm (2017). Finance and Income Inequality: AReview and New Evidence European Journal of Political Economy, Volume 50, 171-195
  • Engerman, S. L., and Sokoloff, K.L (2002). Factor Endowment, Inequality and Paths of Development Among New World Economies. Economia 3: 41-109.
  • Goldberg P.K. and Pavcnik N. (2007). DistributionalEffects of Globalization in DevelopingCountries, Journal of EconomicLiteratureVol. XLV (March 2007), pp. 39–82
  • Graafland, J.,and Lous, B. (2017). Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries, J Happiness Stud (2018) 19:2071–2093
  • Gwartney, J., Lawson, R., Hall, J., Murphy, R. (2018). Economic Freedom of the World: 2018 Annual Report, Fraser Institute
  • Gwartney, J.D., Lawson, R., Block,W. (1996). Economic freedom of the world: 1975–1995. Vancouver, BC: The Fraser Institute.
  • Im, K.S, Pesaran, M.H, Shin,Y. (2003). Testing for Unit Roots in Heterogeneous Panels, Journal of Econometrics 115 (2003) 53 – 74
  • International Monetary Fund (2007). GlobalizationandPoverty, World Economic Outlook, October, (Washington)
  • Jaumotte, F., Lall, S., Papageorgiout, C.(2013). RisingIncomeInequality: Technology or Tradeand Financial Globalization, IMF EconomicReviewVol. 61, No. 2, pp. 273-307
  • Levin, A.,Lin, C.F., Chu, C-S.J, (2002) “Unit RootTests in Panel Data: Asymptotic and Finite Sample Properties”. Journal of Econometrics, 108, 1-22.
  • Lin, C., and Yun, M.S (2016). The Effects of the Minimum Wage on Earnings Inequality: Evidence from China, IZA DP No. 9715
  • Litwin, B.S. (2015). Determining the Effect of the Minimum Wage on Income Inequality, Student Publications. 300. https://cupola.gettysburg.edu/student_scholarship/300
  • Milanoviç, B. (2005). Can WeDiscerntheEffect of Globalization on Income Distribution? EvidencefromHouseholdSurveys, The World Bank EconomıcRevıew,Vol. 19, No. 1, pp. 21–44
  • Pedroni, P. (2004), Panel Cointegration: ASymptoticandFiniteSampleProperties of Pooled Time SeriesTestswith an Applicationtothe PPP Hypothesis. EconometricTheory, 20, 597-625.
  • Pesaran, M. H., Shin, Y., Smith, R.P. (1999). Pooled Mean Group Estimation of Dynamic Heterogeneous Panels. Journal of theAmerican Statistical Association, 94(446), 621-634.
  • Salvador, P.M, and Angulo-Guerrero, M.A (2016) Does EconomicFreedom Increase Income Inequality? Evidence from the EU Countries, Journal of Economic Policy Reform, 19:4, 327-347
  • Scully, G. W. (2002). Economic Freedom, Government Policy and the Trade-off between Equity and Economic Growth, Public Choice 113 (1–2): 77–96.
  • Scully, G.W. (1992). Constitutional Environments and Economic Growth. Princeton: Princeton University Press
  • Solt, Frederick. 2016. "The Standardized World Income Inequality Database." Social Science Quarterly 97(5):1267-1281. SWIID Version 7.1, August 2018. (2018-08-14)
  • Stiglitz E. J. (2012). ThePrice of Inequality: How Today’s Divided Sosiety Endangers Our Future, W.W. Norton&Company, New York London
  • Stolper, W.F., and Samuelson P.A (1941). Protectionand Real Wages, TheReview of EconomicStudies, Vol. 9, No. 1 (Nov., 1941), pp. 58-73
There are 37 citations in total.

Details

Primary Language English
Journal Section Makaleler
Authors

Zeki Akbakay 0000-0002-6736-6483

Publication Date April 13, 2020
Published in Issue Year 2020 Volume: 34 Issue: 2

Cite

APA Akbakay, Z. (2020). Long-Run Relatıonshıp between Economıc Freedom and Income Inequalıty: Evidence from G-7 Countrıes. Atatürk Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 34(2), 371-392. https://doi.org/10.16951/atauniiibd.542690

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