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http://dx.doi.org/10.5392/JKCA.2020.20.06.392

Relationship Between Income Inequality with Gini Coefficient and Consumption Expenditure: The Case of U.S and U.K  

Rhee, Hyun-Jae (청주대학교 경제학과)
Publication Information
The Journal of the Korea Contents Association / v.20, no.6, 2020 , pp. 392-405 More about this Journal
Abstract
The aim of this study is to investigate the effects of income inequality on consumption expenditure in other to understand income-led growth policy. This is basically resulted in the income inequality had gotten worse since global financial crisis in many economies. Malthusian hypothesis which signifies the relationship between the income inequality and the consumption expenditure revisited for this purpose. The paper utilizes multiple break points regression and TGARCH model, and these methodologies are tentatively applied to the case of U.S and U.K. This is because that long-run time series data enables to formulate a stylized fact in general. Empirical evidence suggests that there does not exist a solid relationship among APC, income inequality by Gini coefficient, and consumption expenditure before the year of 2000, but Malthusian hypothesis is supported by weak basis in U.S while strong basis in U.K after since then. It implies that the income inequality has to be alleviated to maximize its effectiveness of the income-led growth policy.
Keywords
APC; Multiple Break Points Regression; Gini Coefficient; Threshold GARCH;
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Times Cited By KSCI : 4  (Citation Analysis)
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