Laura Policardo
Ph.D. Economist, DEPS, University of Siena
Lionello F. Punzo
DEPS, University of Siena, and INCT/PPED at UFRJ
Edgar J. Sanchez Carrera
Facultad de Economia, UASLP (México) and DEPS, University of Siena
Abstract
A threshold estimation technique applied to a panel of 13 Latin American countries over the 1970-2011 time period, reveals the existence of a threshold level for the most popular index of income inequality (Gini's): below it past values of the index or per capita GDP appear to be unable to explain current variations in inequality, while beyond such a level the former may account for the decrease in current income inequality. So, there seems to be a turning point for income inequality though per capita GDP would have no effects on its dynamics. This result contributes further evidence on the dubious existence of the Kuznets Curve, and it links up with recent critical literature on the theme of increasing inequality and its shortcomings for growth.
Keywords
Dynamics of Income Inequality; Kuznets Curve; Threshold Effects
Jel Codes
C23, D63, O40, O54
