Abstract

ANDRADE ARAUJO, Jair  and  CABRAL, Janaina. The Relationship Between Income Inequality and Economic Growth in Brazil: 1995-2012. Prob. Des [online]. 2015, vol.46, n.180, pp.129-150. ISSN 0301-7036.

This work aims to verify the correlation between income inequality and economic growth in Brazilian states using the Kuznets inverted U hypothesis for the time period from 1995 to 2012. The assumption of the inverted U hypothesis -Kuznets (1955)- signals that in the short term, there is a positive correlation between income inequality and per capita income levels. In the long term, however, the inverted U relationship emerges, as the relationship is reversed. These types of income inequality indicators, as well as the Gini and Theil indices and dynamic panel data econometrics, were included in this work to empirically examine the relationship between income inequality and economic growth. This work confirms the Kuznets hypothesis in Brazilian states, among other findings.

Keywords : Income inequality; economic growth; dynamic panel data; econometric methods; Kuznets inverted U.