Income Inequality and Economic Growth: A Cross-Country Analysis
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This study seeks to find a relationship between economic growth and income inequality. Past studies remain divided about this subject, where some find there to be a positive relationship and others support a negative relationship. Single and multiple linear regression models were formed using data from 2010. This study found a positive relationship between economic growth and income inequality. Statistical inference tests supported the significance of all but one variable, unemployment. A robustness test concluded that this variable was jointly significant. Further studies should include increasing sample size, splitting up countries based on level of development, and implementing new explanatory variables.