On the Persistence of Cross-Country Inequality Measures

We examine inequality persistence in a multicountry unbalanced panel using a battery of stationarity and long-run memory tests. Inequality is measured by the Gini indices of income inequality. Results suggest that we cannot reject a unit root in inequality measures. This applies to both gross and ne...

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Bibliographic Details
Published inJournal of money, credit and banking Vol. 49; no. 1; pp. 255 - 266
Main Authors CHRISTOPOULOS, DIMITRIS, MCADAM, PETER
Format Journal Article
LanguageEnglish
Published Columbus Wiley Subscription Services 01.02.2017
Ohio State University Press
Subjects
C23
D63
Econometrics
fractional integration
Gini index
gross/net
Income inequality
Income redistribution
Inequality
Measures of variability
panel
SHORTER PAPERS, DISCUSSIONS, AND LETTERS
structural break
Studies
unit root
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ISSN0022-2879
1538-4616
DOI10.1111/jmcb.12374

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Summary:We examine inequality persistence in a multicountry unbalanced panel using a battery of stationarity and long-run memory tests. Inequality is measured by the Gini indices of income inequality. Results suggest that we cannot reject a unit root in inequality measures. This applies to both gross and net indices: thus while redistributive measures have reduced the level of inequality, they have not sufficiently modified its apparent unit root. A more likely conclusion is that inequality measures are exceptionally persistent if not strictly a unit root. We also introduce a new panel stationarity test useful for series subject to unknown structural breaks.
Bibliography:We thank Kenneth West (editor), two anonymous referees, Valentina Corradi, Peter Phillips, Frederic Solt, and Elias Tzavalis for helpful comments. The views expressed are not necessarily those of the ECB.
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 14
ISSN:0022-2879
1538-4616
DOI:10.1111/jmcb.12374