Nexus between inflation, income inequality, and economic growth in Ethiopia.

Autor: Ali AK; Department of Economics, College of Business and Economics, Samara University, Samara, Ethiopia., Asfaw DM; Department of Economics, University of Gondar, College of Business and Economics, Gondar, Ethiopia.
Jazyk: angličtina
Zdroj: PloS one [PLoS One] 2023 Nov 16; Vol. 18 (11), pp. e0294454. Date of Electronic Publication: 2023 Nov 16 (Print Publication: 2023).
DOI: 10.1371/journal.pone.0294454
Abstrakt: The relationship between inflation, income inequality, and economic growth is a subject of intense debate among economic researchers and policymakers. This study aims to analyze this relationship in Ethiopia using advanced statistical techniques such as VEC (vector error correction) model with Granger causality, and Johansen's cointegrated. The study covers the period from 1980 to 2022 and includes pre and post-estimation diagnosis tests to ensure the accuracy of the model. The results indicate the presence of a long-run relationship among inflation, income inequality, and economic growth, as confirmed by Johansen's cointegrated test. Additionally, the vector error correction model shows a strong long-run relationship between economic growth, income inequality, and inflation. In the short run, there is a significant association between income inequality and economic growth, as well as between inflation and economic growth. The Granger causality test reveals a bidirectional causality between economic growth and income inequality and between economic growth and inflation. However, there is a unidirectional causality from inflation to income inequality. Based on these findings, it is suggested that the government should implement various strategies and policies, including redistribution policies, social safety nets, promoting inclusive economic growth, coordinating effective monetary and fiscal policies, implementing progressive taxation, and reforming the labor market.
Competing Interests: The authors have declared that no competing interests exist.
(Copyright: © 2023 Ali, Asfaw. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.)
Databáze: MEDLINE
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