An Empirical Analysis of the Effect of Income Inequality on Economic Growth in West Africa
Journal Title: International Journal of Financial Economics - Year 2014, Vol 3, Issue 4
Abstract
The study empirically examined the effect of inequality on economic growth in West Africa covering the period 1980-2011, and using panel data from various secondary sources. The fixed effect and random effect, generalized method of moments (GMM), and granger causality models were applied in the study. The dependent variable is real per capita GDP while the independent variables are Gini-coefficient, poverty, human capital and openness. The findings based on the adopted GMM model revealed that inequality and poverty have significantly negative effect on economic growth in West Africa while human capital and openness are positively related to economic growth in the region. The study therefore recommended among others, the need for reinvestment of the proceeds of growth into land reforms, poverty alleviation, human capital and infrastructural development.
Authors and Affiliations
Nazifi Abdullahi Darma, Muhammad Ali
Keywords
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