000			02085nam a22001577a 4500
999			_c521649 _d521649
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100			_aKhatun, Fahmida and Saadat, Syed Yusuf _937365
245			_aThe optimum level of income inequality in south Asia: An econometric analysis
260			_aSouth Asia Economic Journal
300			_a23(1), Mar, 2022: p.7-29
520			_aInequality in the distribution of income can be beneficial or detrimental for economic growth depending on the level of inequality. This study advocates that when income inequality is low, increase in income inequality increases economic growth, whereas when income inequality is high, increase in income inequality decreases economic growth. The level of inequality that maximizes economic growth is defined as the optimum level of income inequality. This article attempts to determine the optimum level of income inequality for South Asia through an econometric analysis. It uses panel data from Bangladesh, India, Nepal, Pakistan and Sri Lanka, over a 34-year period to undertake a systematic investigation using panel instrumental variables techniques. The results of this study confirm that an optimum level of income inequality does exist, and occurs at a Gini coefficient value of 0.4492. Thus, this research empirically confirms that the relationship between income inequality and economic growth is non-linear. Further calculations show that for an economy that is at the optimum level of income inequality, the per capita gross domestic product can be expected to double within approximately 13 years, provided all other factors are held constant. However, a change in the Gini coefficient by 0.10 units in either direction—higher or lower—away from the optimum level, can increase the number of years for the per capita gross domestic product to double by 55 to 57 years, depending on the method of approximation. – Reproduced
650			_aEconomic growth: Income inequality, South Asia. _935773
773			_aSouth Asia Economic Journal
906			_aINCOME INEQUALITY
942			_cAR