Economic growth, globalization and income inequality: the case of Ukraine

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Abakumova, Juliet
Primierova, Olena
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Income inequality has been widely debated since the beginning of the economic development and this topic is especially present in today’s economic world. As hypotheses, as a rule, statements are tested: economic growth leads first to an increase, and then to a decrease in inequality; high income differentiation stimulates higher growth rates; the processes of globalization contribute to reducing inequalities in the world. The purpose of the empirical part of the present research is to analyze the relationships between income inequality and economic growth, income inequality and globalization. The study has employed a single-country regression to investigate the existence of the Kuznets curve hypothesis for the Ukraine economy over the period 1995-2016. The bounds testing (ARDL) approach to cointegration is applied to examine the long-run relationship between the variables. The results, when regressing Gini index and GDP per capita based on purchasing power parity, confirm the presence of hidden cointegration. The Granger causality test is also applied in order to test the existence of a causal relationship between the economic growth and income inequality. We examine the globalization-income inequality relationship and causality. Globalization is measured by the KOF globalization index. For case of Ukraine results show that globalization and income inequality are positively correlated, Granger causality was confirmed.
income inequality, economic growth, globalization, hidden cointegration, bounds testing approach, article
Abakumova Ju. Economic growth, globalization and income inequality: the case of Ukraine / Abakumova Ju., Primierova O. // Globalization and Its Socio-Economic Consequences : 18th International Scientific Conference, (Rajecke Teplice, Slovak Republic, 10th - 11th October 2018). - Rajecke Teplic, 2018. - Part VI : Inequality in Society. - P. 2445-2452.