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Finance dissertation and assignment writing for UK universities.

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Jun 19, 2010

Using a dataset consisting of 41 developed and developing countries across the globe over the time phase of 30 years, I consider if income inequality is harmful for economic growth. I have employed five-year’s averages of dataset and cross-sectional regressions to calculate approximately the consequences of inequality on short-run and medium-run economic growth. Using the similar five-year’s averages dataset but this occasion employing pooled and fixed effects techniques, I estimate the effects of inequality on successive growth by introducing lagged values.

Utilising cross-sectional regressions, I do not find out a consistent positive or negative consequences of inequality on economic growth. Furthermore, with this method the impact of income inequality is insignificant majority of the time. However, pooled estimations, cross-section fixed effects, and fixed effects in both proportions together (cross-section and period) consequence in income inequality being positively and significantly related to subsequent growth, although period fixed effects negatively but insubstantially influence economic growth. A high degree of observed work in this study proposes that income inequality has positive implications and therefore it is not harmful to subsequent growth.

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