The impact of inflation on income inequality: the role of institutional quality

2020 ◽  
Vol 27 (21) ◽  
pp. 1735-1738
Author(s):  
Chee-Hong Law ◽  
Siew-Voon Soon
Keyword(s):  
Income Inequality ◽  
Institutional Quality ◽  
The Impact

scholarly journals Credit composition and income inequality in Vietnam: an empirical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Quoc Hoi ◽  
Hương Lan Trần
Keyword(s):  
Income Inequality ◽  
Educational Level ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Primary Data ◽  
Data Set ◽  
Content Type ◽  
Private Credit ◽  
The Impact

PurposeThis paper aims to examine the credit composition and income inequality reduction in Vietnam. In particular, the authors focus on the distinction between policy and commercial credits and investigate whether these two types of credit had adverse effects on income inequality. The authors also examine whether the impact of policy credit on income inequality is conditioned by the educational level and institutional quality.Design/methodology/approachThe authors use the primary data set, which contains a panel of 60 provinces collected from the General Statistics Office of Vietnam from 2002 to 2016. The authors employ the generalized method of moments to solve the endogenous problem.FindingsThe authors show that while commercial credit increases income inequality, policy credit contributes to reducing income inequality in Vietnam. In addition, we provide evidence that the institutional quality and educational level condition the impact of policy credit on income inequality. Based on the findings, the paper implies that it was not the size of the private credit but its composition that mattered in reducing income inequality, due to the asymmetric effects of different types of credit.Originality/valueThis is the first study that examines the links between the two components of credit and income inequality as well as constraints of the links. The authors argue that analyzing the separate effects of commercial and policy credits is more important for explaining the role of credit in income inequality than the size of total credit.

scholarly journals The Impact of the Oil Revenues on the Standard of Living in Oil-Exporting Countries of the Former Soviet Union

2014 ◽  
Author(s):  
Cihan Bulut ◽  
Fakhri Hasanov ◽  
Elchin Suleymanov
Keyword(s):  
Soviet Union ◽  
Income Inequality ◽  
Former Soviet Union ◽  
Standard Of Living ◽  
Speed Of Adjustment ◽  
Long Run ◽  
Short Run ◽  
Oil Revenues ◽  
The Impact

The aim of our study is to examine the impact of the oil revenues on the standard of living in oil-exporting countries of the former Soviet Union and to make policy suggestions based on the obtained findings. It has been explain that resource dependency adjust the structure of these countries' economies, which leads to income inequality compensation changes in different sectors of the economy. Characteristic of resource- rich of post-Soviet oil exporters countries - Russia, Kazakhstan and Azerbaijan have been analyzed. It has been demonstrated that dependency on resources modifies the structure of these countries’ economies, which leads to income inequality based on employment via a mechanism of labor compensation changes in different sectors of the economy. We are going to employ co-integration and error correction methods in our empirical analysis. Is there a long-run relationship between the oil revenues and the standard of living in oil-exporting countries of the former Soviet Union; What is the role of dynamics of the oil revenues in the standard of living in the short run; What is the magnitude of speed of adjustment from the short-run fluctuation towards long-run equilibrium of the system; What is the direction of long- and short-run causality in the oil revenues - standard of living relationship.

scholarly journals The Impact of Institutional Quality on Social Cohesion: Evidence from Worldwide Perspective

2020 ◽  
Vol Volume 4 (Issue 3) ◽  
pp. 207-231
Author(s):  
Muhammad Nadeem ◽  
Mumtaz Anwar ◽  
Zahid Pervaiz
Keyword(s):  
Income Inequality ◽  
Social Cohesion ◽  
Ethnic Diversity ◽  
Institutional Quality ◽  
Fixed Effect Model ◽  
Effect Model ◽  
Two Factors ◽  
The Impact ◽  
Harmful Effects

Diversity and socioeconomic deprivation have been widely discussed as determinants of social cohesion. These two factors are considered to be a threat to social cohesion. The existing literature identifies the problem however the literature suggesting the solution is very limited. The most important determinant which can cure the problems of social cohesion is the better quality of institutions, however, the literature on this aspect is very scant. Current study has investigated the impact of institutional quality on social cohesion. Current study employs the fixed effect model for estimation. The analysis is conducted for 135 countries, using five-year average panel data. The results suggest that institutional quality augments social cohesion, while ethnic diversity, income inequality, and globalization are a threat to social cohesion. Gender equality and per capita income also augment social cohesion. Moreover, the threat to social cohesion is greater when there is: low institutional quality and high: ethnic diversity, and income inequality as compared to a situation where there are high institutional quality and low: ethnic diversity, and income inequality. The results further suggest that the harmful effects of ethnic diversity, globalization, and inequality can be, not only overcome by institutional quality but can also be put to use to enhance social cohesion.

scholarly journals Capital account liberalization and income inequality: a panel study of 28 European countries

2021 ◽  
Vol 24 (1) ◽  
Author(s):  
Muhammad Taufik Radhianshah ◽  
Akhmad Syakir Kurnia
Keyword(s):  
Income Inequality ◽  
Panel Study ◽  
Institutional Quality ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Financial Transaction ◽  
International Scope ◽  
Financial Depth ◽  
Cross Country

Financial globalization has evolved from domestic policy to international scope policy. One of its form is Capital account liberalization which we can observe from the declining number of restrictions among countries for cross-border financial transaction, and the increasing level of capital flow between countries. Europe cross-country financial transaction has been increasing for the last three decades and this increase happened simultaneously with the increase of income inequality as measured with Gini index. This condition gives impression that there is a positive correlation between income inequality and capital account liberalization. This research aims to study whether income inequality corresponds to the increase of capital account liberalization in 28 Europe countries. Furthermore, this research seeks to understand the role of institutional quality and financial depth as threshold variables. By employing System GMM Estimator on balanced panel data, this study finds that capital account liberalization positively correlated with income inequality and institutional quality proven to be important threshold variable. These findings emphasize the urgency for policy maker to consider institutional quality before or during the implementation of capital account liberalization.

scholarly journals Foreign Direct Investment and Economic Growth relationships: The moderation role of institutional quality

2021 ◽  
Vol 17 ◽  
pp. 41-54
Author(s):  
Vu Tuan Anh ◽  
Tran Ngoc Khanh Linh
Keyword(s):  
Economic Growth ◽  
Quantitative Methods ◽  
Institutional Quality ◽  
Secondary Data ◽  
The State ◽  
Asian Countries ◽  
Effect Model ◽  
The Impact

Most studies on the effect of the role of institutional quality on the relationship between foreign investment and economic growth have been carried out in Western countries. Very few studies on the above-mentioned relationships have been done in Asian countries during. This paper will be conducted in Asian countries using the following three models: Pooled OLS, Fixed effect model, and Random effect model. This paper uses secondary data from 10 Asian countries from 2011 to 2018. The empirical results show that (1): FDI has a positive effect on the economies of the countries. Asia between 2002 and 2018 (2) The quality of the state strengthens the impact of FDI on the economies of Asian countries between 2011 and 2018. These findings imply that if improving the quality of institutions, the state will attract more FDI and economic development The research paper is based on the scientific approach of quantitative methods to solve the problems posed, practical and effective service for the completion of the research purpose. The secondary data collected from the worldbank.org to create asymmetric data tables will be processed on STATA software.

scholarly journals Role of institutional quality in economic development: A case study of Asian countries

2021 ◽  
Vol 19 (2) ◽  
pp. 357-369
Author(s):  
Oanh Kim Thi Tran ◽  
Hac Dinh Le ◽  
Anh Hong Viet Nguyen
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Trade Openness ◽  
Institutional Quality ◽  
Policy Implications ◽  
Asian Countries ◽  
Regression Methods ◽  
Key Factor ◽  
The Impact

The paper investigates the impact of institutional quality on economic growth by taking 48 countries in Asia between 2005 and 2018. By using the quantile regression methods with panel data, institutional quality is found to be a key factor of economic development. However, in the lower-income Asian countries, the institution with better quality appears to promote the growth more effectively than in the higher-income ones. Moreover, the paper also finds out a nonlinear relationship between institutions and economic growth. The results show that there is an institutional threshold for economic growth to reach its highest level. If the institution indicator exceeds the threshold, it causes the reverse effect on the growth. Moreover, the economic growth of Asian countries is also affected by inflation (INF), labor force (LABO), trade openness (OPEN), and infrastructure (TELE). From that, the study suggests some policy implications for Asian countries and Vietnam, in particular, in order to improve institutions contributing to economic growth.

scholarly journals Measuring the Impact of Fiscal Decentralization on Economic Growth and Income Inequality using the Heuristic Network

2019 ◽  
Vol 8 (5C) ◽  
pp. 1016-1024
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Fiscal Decentralization ◽  
Regional Economic Growth ◽  
Financial Resources ◽  
Regional Economic ◽  
East Kalimantan ◽  
Regional Budgets ◽  
The Impact

To achieve regional economic growth, the role of regional budgets is very important. In this regard, the utilization of regional economic and financial resources is an important factor in supporting the implementation of the fiscal decentralization system in the area. The implementation of fiscal decentralization in Indonesia is marked by the process of transferring financial resources to regions in significant amounts. In the last five years (2011-2015), the proportion of balancing funds to total regional income nationally reached an average of 73%. Despite the huge spike in decentralization policies, the implementation of fiscal decentralization in East Kalimantan Province, one of Indonesia's provinces, till now has not been able to bring about improving the welfare of local communities. In reality, there is still income inequality, although still relatively low in East Kalimantan Province. This study performs to measure the impact of fiscal decentralization on economic growth and income inequality in East Kalimantan – Indonesia. The hypothesis in this study is that fiscal decentralization negatively affects income inequality directly or indirectly through economic growth in East Kalimantan – Indonesia. The aim of this study is how to use the heuristic network to prove this hypothesis.

scholarly journals Fiscal Response to Terrorism in Pakistan: The Role of Institutions

2021 ◽  
Vol 5 (1) ◽  
pp. 154-192
Author(s):  
Tahir Mukhtar ◽  
Zainab Jehan
Keyword(s):  
Fiscal Policy ◽  
Time Series Data ◽  
Institutional Quality ◽  
Jel Classification ◽  
Defense Spending ◽  
Series Data ◽  
Tax Revenue ◽  
The Government ◽  
The Impact

This study empirically estimates the fiscal consequences of terrorism in Pakistan by using annual time series data from 1984 to 2016. By employing the autoregressive distributed lag (ARDL) technique, the study has gauged the impact of terrorist incidents on two important facets of fiscal policy, namely, tax revenue and defense spending. The results reveal that terrorism has detrimental ramifications for fiscal policy in Pakistan. Specifically, on the one hand, an increase in terrorist incidents tends to bring a fall in tax revenue while on the other hand, they induce a rise in defense outlays, thus deteriorating both fronts of the fiscal position. Notably, the moderating role of institutional quality appears significant and indicates that institutional quality has not only a significant direct impact on fiscal policy, but it also helps in completely mitigating (reducing) the harmful impact of terrorism on defense spending (tax revenue) in Pakistan. These findings suggest that there is a need to take appropriate steps for strengthening institutional setup to control the fallouts of terrorism on fiscal behavior of the government of Pakistan. Keywords: Terrorism; Tax Revenue; Institutional Quality; ARDL JEL Classification: E62; H2; E02; H5; F35

scholarly journals Does Fiscal Decentralisation Matter for Poverty and Income Inequality in Pakistan?

2016 ◽  
Vol 55 (4I-II) ◽  
pp. 781-802 ◽  
Author(s):  
Sehrish Shahzad ◽  
Bushra Yasmin
Keyword(s):  
Income Inequality ◽  
Institutional Quality ◽  
Jel Classification ◽  
Marginal Effect ◽  
Negative Consequences ◽  
Time Period ◽  
Potential Benefits ◽  
Fiscal Decentralisation ◽  
Generalised Method Of Moments ◽  
The Impact

This study endeavours to investigate the impact of fiscal decentralisation on the welfare concerns of poverty, and income inequality in Pakistan for the time period 1972 to 2013. In order to capture the multi-dimensional nature of fiscal decentralisation, three indicators are used namely; revenue decentralisation, expenditure decentralisation and composite decentralisation. Further, the role of institutional quality is also incorporated in apprehending the responsiveness of welfare issues towards the process of fiscal decentralisation. The estimation technique of Generalised Method of Moments (GMM) is employed for estimating the impact of fiscal decentralisation on poverty and income inequality. The empirical findings suggest that fiscal decentralisation has discretely resulted in increasing poverty and income inequality in Pakistan, but the presence of better institutional quality along with fiscal decentralisation can promise to mitigate the negative consequences of fiscal decentralisation for poverty and income inequality in Pakistan. Although, the indirect effect of fiscal decentralisation on welfare concerns, through institutional quality exhibits a fluctuating trend over time, but its average marginal effect is lower than the direct effect of fiscal decentralisation on welfare concerns. Hence, it can be perceived that the log-run welfare issues can be tackled effectively in the presence of institutional quality with a rational level of fiscal decentralisation. Also in order to reap the potential benefits of fiscal decentralisation for poverty and income inequality that has remained a catastrophe in case of Pakistan. JEL Classification: I3, 023 H53 Keywords: Fiscal Decentralisation, Welfare

scholarly journals Does FDI Caused Profit Repatriation: Exploring the Moderating Role of Governance Institutions

2020 ◽  
Vol 10 (2) ◽  
pp. 134
Author(s):  
Ghalib Bin Faheem ◽  
Danish Ahmed Siddiqui
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Institutional Quality ◽  
Developed Countries ◽  
Doing Business ◽  
Governance Institutions ◽  
The Cost ◽  
The Impact ◽  
Moderating Role

This paper investigates the impact of foreign direct investment, institutional quality on profit repatriation and net primary income taken as a proxy of profit repatriation. Inflation and GDP per capital were taken as controls. Data sample of 54 countries (developing) has been used for the first model of this research. And data sample of 100 countries (developed and developing both) has been used for the second model. The sample period is from 2008-2017. Finding of this study indicate that institutions quality is negatively impacting profit repatriation and net primary income. It also reveals foreign direct investment is negatively affecting profit repatriation but positively impacting net primary income. Results reveal that investors are unwilling to invest in countries where institutions encourage corruption, because these factors increase the cost of doing business. Developing countries have weaker institutions than developed countries and so, investors will be taking their profit back and not willing to re-invest in that particular country.

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