The Kuznets hypothesis, that is, inequality first rises and then falls as the economy advances, is often tested by regressing inequality on income and its squared term (along with other determinants). Findings of a significantly negative coefficient on income and a significantly positive...

This paper jointly estimates the effect of inequality on growth and the impact of growth on inequality vis a simultaneous equations model. Results show that higher inequality is detrimental to growth whereas faster growth worsens the extent of income distribution.

In a recent interesting paper, Frank (2009) investigated the long-run inequality--growth nexus with a large panel of annual data for the 48 states in the United States over the 1945 to 2004 post-war period. By implementing the Pooled Mean Group (PMG) estimators, Frank (2009) concluded that there...

This article contributes to the empirical literature of Okun's law in three respects. First, in contrast to the limited data used in the existing studies, we employ two extensive (across countries and across states, i.e. within a country) panel data sets to investigate the validity of Okun's...