Sustainable Finance and Digital Innovation: Pathways to Inclusive Growth
Articles

The Relationship Between Income Inequality and Economic Growth: A Comprehensive Econometric Analysis

PDF
  • Anirban Hazra,
  • Neelanjan Mitra
Anirban Hazra
Assistant Professor, Department of Management, Swami Vivekananda University, Kolkata
Neelanjan Mitra
Assistant Professor, Department of Management, Swami Vivekananda University, Kolkata

Published 2025-12-26

Keywords

  • Income Inequality,
  • Economic Growth,
  • Kuznets Curve,
  • Fixed-Effects Regression,
  • Gini Coefficient

How to Cite

Hazra, Anirban, and Neelanjan Mitra. “The Relationship Between Income Inequality and Economic Growth: A Comprehensive Econometric Analysis”. Swami Vivekananda University Press, Dec. 2025, pp. 109-16, https://swamivivekanandauniversitypress.com/index.php/svup/article/view/394.

Copyright (c) 2025 Swami Vivekananda University Press

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Abstract

This research paper explores the dynamic relationship between income inequality and economic growth, with a specific focus on both developed and developing countries over two decades. Using a comprehensive econometric approach, we analyze the Kuznets Curve hypothesis, which posits an inverted U-shaped relationship between inequality and growth. Our study uses a fixed-effects regression model, along with advanced statistical techniques such as instrumental variables and quantile regression. Python is utilized to perform in-depth data analysis and visualization, ensuring the precision and clarity of results. The findings show that income inequality initially rises with economic growth but decreases beyond a certain point, confirming the Kuznets Curve hypothesis. Policy recommendations are made to help economies balance growth with equality.

DOI - https://doi.org/10.65525/SVUP.9788199651548.2026.109-116

PDF