Linkage Between Economic Growth and Income Inequality in Ethiopia

Gashaw Getaye

doi:doi:10.11648/j.ijsmit.20210701.11

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Linkage Between Economic Growth and Income Inequality in Ethiopia

Gashaw Getaye

Published in International Journal of Sustainability Management and Information Technologies (Volume 7, Issue 1)

Received: 10 December 2020 Accepted: 23 December 2020 Published: 12 March 2021

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Abstract

There are many macroeconomic and non macro economics factors or variables related to the country’s economic growth. Among the most important factors believed to be related to the rate of economic growth, the issue of income inequality in the process of national income distribution is the vital one. So, understanding the relationship between these two economic variables is important. If there is a clearer understanding about the relationship between income inequality and the rate of economic growth, particular economic policies could be employed in the appropriate manner to deal with income inequality and encourage economic growth. So, main objective of the study is to analyze the linkage between economic growth and income inequality in Ethiopia. The linear regression model is applied in order to investigate the long-run and short run relationship between the dependent variable (real GDP) and included explanatory variable. The result shows that there is a stable long run relationship between real GDP and included variables. And the empirical results reveal that income inequality measured by gini coefficient is found to have negative impact on economic growth. The study has also an important policy implication which implies that economic growth can be improved significantly when the income inequality among people reduced through different redistributive mechanisms.

Published in	International Journal of Sustainability Management and Information Technologies (Volume 7, Issue 1)
DOI	10.11648/j.ijsmit.20210701.11
Page(s)	1-10
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Economic Growth, Income Inequality, Gini Coefficient, Ethiopia

References

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Gashaw Getaye. (2021). Linkage Between Economic Growth and Income Inequality in Ethiopia. International Journal of Sustainability Management and Information Technologies, 7(1), 1-10. https://doi.org/10.11648/j.ijsmit.20210701.11

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ACS Style

Gashaw Getaye. Linkage Between Economic Growth and Income Inequality in Ethiopia. Int. J. Sustain. Manag. Inf. Technol. 2021, 7(1), 1-10. doi: 10.11648/j.ijsmit.20210701.11

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AMA Style

Gashaw Getaye. Linkage Between Economic Growth and Income Inequality in Ethiopia. Int J Sustain Manag Inf Technol. 2021;7(1):1-10. doi: 10.11648/j.ijsmit.20210701.11

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@article{10.11648/j.ijsmit.20210701.11,
  author = {Gashaw Getaye},
  title = {Linkage Between Economic Growth and Income Inequality in Ethiopia},
  journal = {International Journal of Sustainability Management and Information Technologies},
  volume = {7},
  number = {1},
  pages = {1-10},
  doi = {10.11648/j.ijsmit.20210701.11},
  url = {https://doi.org/10.11648/j.ijsmit.20210701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsmit.20210701.11},
  abstract = {There are many macroeconomic and non macro economics factors or variables related to the country’s economic growth. Among the most important factors believed to be related to the rate of economic growth, the issue of income inequality in the process of national income distribution is the vital one. So, understanding the relationship between these two economic variables is important. If there is a clearer understanding about the relationship between income inequality and the rate of economic growth, particular economic policies could be employed in the appropriate manner to deal with income inequality and encourage economic growth. So, main objective of the study is to analyze the linkage between economic growth and income inequality in Ethiopia. The linear regression model is applied in order to investigate the long-run and short run relationship between the dependent variable (real GDP) and included explanatory variable. The result shows that there is a stable long run relationship between real GDP and included variables. And the empirical results reveal that income inequality measured by gini coefficient is found to have negative impact on economic growth. The study has also an important policy implication which implies that economic growth can be improved significantly when the income inequality among people reduced through different redistributive mechanisms.},
 year = {2021}
}

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TY  - JOUR
T1  - Linkage Between Economic Growth and Income Inequality in Ethiopia
AU  - Gashaw Getaye
Y1  - 2021/03/12
PY  - 2021
N1  - https://doi.org/10.11648/j.ijsmit.20210701.11
DO  - 10.11648/j.ijsmit.20210701.11
T2  - International Journal of Sustainability Management and Information Technologies
JF  - International Journal of Sustainability Management and Information Technologies
JO  - International Journal of Sustainability Management and Information Technologies
SP  - 1
EP  - 10
PB  - Science Publishing Group
SN  - 2575-5110
UR  - https://doi.org/10.11648/j.ijsmit.20210701.11
AB  - There are many macroeconomic and non macro economics factors or variables related to the country’s economic growth. Among the most important factors believed to be related to the rate of economic growth, the issue of income inequality in the process of national income distribution is the vital one. So, understanding the relationship between these two economic variables is important. If there is a clearer understanding about the relationship between income inequality and the rate of economic growth, particular economic policies could be employed in the appropriate manner to deal with income inequality and encourage economic growth. So, main objective of the study is to analyze the linkage between economic growth and income inequality in Ethiopia. The linear regression model is applied in order to investigate the long-run and short run relationship between the dependent variable (real GDP) and included explanatory variable. The result shows that there is a stable long run relationship between real GDP and included variables. And the empirical results reveal that income inequality measured by gini coefficient is found to have negative impact on economic growth. The study has also an important policy implication which implies that economic growth can be improved significantly when the income inequality among people reduced through different redistributive mechanisms.
VL  - 7
IS  - 1
ER  -

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Author Information

Gashaw Getaye

Economics Department, Debark University, Debark, Ethiopia

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Gashaw Getaye. (2021). Linkage Between Economic Growth and Income Inequality in Ethiopia. International Journal of Sustainability Management and Information Technologies, 7(1), 1-10. https://doi.org/10.11648/j.ijsmit.20210701.11

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ACS Style

Gashaw Getaye. Linkage Between Economic Growth and Income Inequality in Ethiopia. Int. J. Sustain. Manag. Inf. Technol. 2021, 7(1), 1-10. doi: 10.11648/j.ijsmit.20210701.11

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AMA Style

Gashaw Getaye. Linkage Between Economic Growth and Income Inequality in Ethiopia. Int J Sustain Manag Inf Technol. 2021;7(1):1-10. doi: 10.11648/j.ijsmit.20210701.11

Copy | Download

@article{10.11648/j.ijsmit.20210701.11,
  author = {Gashaw Getaye},
  title = {Linkage Between Economic Growth and Income Inequality in Ethiopia},
  journal = {International Journal of Sustainability Management and Information Technologies},
  volume = {7},
  number = {1},
  pages = {1-10},
  doi = {10.11648/j.ijsmit.20210701.11},
  url = {https://doi.org/10.11648/j.ijsmit.20210701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsmit.20210701.11},
  abstract = {There are many macroeconomic and non macro economics factors or variables related to the country’s economic growth. Among the most important factors believed to be related to the rate of economic growth, the issue of income inequality in the process of national income distribution is the vital one. So, understanding the relationship between these two economic variables is important. If there is a clearer understanding about the relationship between income inequality and the rate of economic growth, particular economic policies could be employed in the appropriate manner to deal with income inequality and encourage economic growth. So, main objective of the study is to analyze the linkage between economic growth and income inequality in Ethiopia. The linear regression model is applied in order to investigate the long-run and short run relationship between the dependent variable (real GDP) and included explanatory variable. The result shows that there is a stable long run relationship between real GDP and included variables. And the empirical results reveal that income inequality measured by gini coefficient is found to have negative impact on economic growth. The study has also an important policy implication which implies that economic growth can be improved significantly when the income inequality among people reduced through different redistributive mechanisms.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Linkage Between Economic Growth and Income Inequality in Ethiopia
AU  - Gashaw Getaye
Y1  - 2021/03/12
PY  - 2021
N1  - https://doi.org/10.11648/j.ijsmit.20210701.11
DO  - 10.11648/j.ijsmit.20210701.11
T2  - International Journal of Sustainability Management and Information Technologies
JF  - International Journal of Sustainability Management and Information Technologies
JO  - International Journal of Sustainability Management and Information Technologies
SP  - 1
EP  - 10
PB  - Science Publishing Group
SN  - 2575-5110
UR  - https://doi.org/10.11648/j.ijsmit.20210701.11
AB  - There are many macroeconomic and non macro economics factors or variables related to the country’s economic growth. Among the most important factors believed to be related to the rate of economic growth, the issue of income inequality in the process of national income distribution is the vital one. So, understanding the relationship between these two economic variables is important. If there is a clearer understanding about the relationship between income inequality and the rate of economic growth, particular economic policies could be employed in the appropriate manner to deal with income inequality and encourage economic growth. So, main objective of the study is to analyze the linkage between economic growth and income inequality in Ethiopia. The linear regression model is applied in order to investigate the long-run and short run relationship between the dependent variable (real GDP) and included explanatory variable. The result shows that there is a stable long run relationship between real GDP and included variables. And the empirical results reveal that income inequality measured by gini coefficient is found to have negative impact on economic growth. The study has also an important policy implication which implies that economic growth can be improved significantly when the income inequality among people reduced through different redistributive mechanisms.
VL  - 7
IS  - 1
ER  -

Copy | Download