Eotvos Lorand University, Institute of Business Economics; Neumann Janos University, Faculty of Economics and Business; Budapest, Hungary
4th International Conference – ERAZ 2018 – KNOWLEDGE BASED SUSTAINABLE ECONOMIC DEVELOPMENT, Sofia- Bulgaria, June 7, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; Faculty of Business Studies, Mediterranean University – Podgorica, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia, ISBN 978-86-80194-12-7
In this paper, the evolution of income inequality in five Central and Eastern European (CEE) post-socialist countries, members of the European Union (EU) – the Czech Republic, Hungary, Poland, Slovakia, and Slovenia – is examined. The similarities of political and economic changes in these countries allow an integrated analysis of their income inequality developments. Moreover, as these countries represent a unique group around the border between high-income and upper-middle-income countries, the paper can also contribute to the debate on inequality in countries at different levels of economic development. It focuses on several relating and often contradictory theories and empirical evidence from the past few years, trying to offer a comprehensive picture of the progress of inequality in this region.
After a short introduction, the theories about the relationship between inequality and growth are summarized. Then the empirical evidence about income inequality in CEE countries is presented and compared with EU-wide data. Finally, some concluding remarks close the paper.
Inequality; Economic growth; Central and Eastern Europe
- Acemoglu, D., 2011. Thoughts on inequality and the financial crisis. In AEA meeting, Denver (Vol. 7).
- Aghion, P., Caroli, E., & Garcia-Penalosa, C., 1999. Inequality and economic growth: the perspective of the new growth theories. Journal of Economic literature, 37(4), 1615-1660.
- Alesina, A., & Rodrik, D., 1994. Distributive politics and economic growth. The quarterly journal of economics, 109(2), 465-490.
- Bardhan, P., 2007. Poverty and inequality in China and India: Elusive link with globalisation. Economic and Political Weekly, 3849-3852.
- Barro, R. J., 2000. Inequality and Growth in a Panel of Countries. Journal of economic growth, 5(1), 5-32.
- Bertola, G., 1993. Market structure and income distribution in endogenous growth models. American Economic Review, 83(2), 1184-99.
- Blau, F. D. and Kahn, L. M., 2009, ‘Inequality and earnings distribution’, in Salverda, W., Nolan, B. and Smeeding, T. M. (eds.), The Oxford handbook of economic inequality, Oxford University Press, Oxford.
- Boushey H., 2011. The Endangered Middle Class: Is the American Dream Slipping out of Reach for American Families? Testimony before the U.S. Senate Committee on Health, Education, Labour, and Pensions, May 12, 2011
- Bubbico, R L and L Freytag, 2018. Inequality in Europe, European Investment Bank, January 2018.
- Carvalho, L., & Rezai, A., 2015. Personal income inequality and aggregate demand. Cambridge Journal of Economics, 40(2), 491-505.
- Corak, M. 2013. Income inequality, equality of opportunity, and intergenerational mobility. J. Econ. Perspect. 27, 79–102.
- Dabla-Norris, M. E., Kochhar, M. K., Suphaphiphat, M. N., Ricka, M. F., & Tsounta, E., 2015. Causes and consequences of income inequality: a global perspective. International Monetary Fund.
- Darvas, Z., 2016. Brexit vote boosts case for inclusive growth. Bruegel Blog Post. https://bruegel.org/2016/07/brexit-vote-boosts-case-forinclusive-growth/
- Economist, 2016. The new wave – Globalisation and inequality, The Economist, Apr 2nd 2016
- Forbes, K. J., 2000. A Reassessment of the Relationship between Inequality and Growth. American economic review, 869-887.
- Inchauste, G. and J. Karver, 2018. Understanding Changes in Inequality in the EU Background to “Growing United: Upgrading Europe’s Convergence Machine”, World Bank report 2018 January, World Bank Group
- Krueger, A., 2012. The rise and consequences of inequality. Presentation made to the Center for American Progress, January 12th. Available at https://www. americanprogress. org/events/2012/01/12/17181/the-rise-and-consequences-of-inequality.
- Milanovic, B., 2016. Global Inequality: A New Approach for the Age of Globalization, Harvard University Press.
- Nolan, B., Roser, M. and Thewissen, S., 2016, GDP per capita versus median household income: What gives rise to divergence over time?, Oxford INET Working Paper Series, No. 2016-03.
- Ostry, M. J. D., Berg, M. A., & Tsangarides, M. C. G., 2014. Redistribution, inequality, and growth. International Monetary Fund.
- Persson, T., & Tabellini, G., 1994. Is inequality harmful for growth?. The American Economic Review, 600-621.
- Piketty, T. 2014. Capital in the Twenty-First Century, Harvard University Press, ISBN 9780674430006, April.
- Piketty, T. and E. Saez, 2014. Inequality in the long run, Science 23 May 2014: Vol. 344 no. 6186 pp. 838-843.
- Piketty, T. and G. Zucman, 2014. Capital is back: Wealth-income ratios in rich countries, 1700-2010. Q. J. Econ. 129, in press
- Rajan, R. G., 2011. Fault lines: How hidden fractures still threaten the world economy. Princeton University Press.
- Sachs, J. and Warner, A. M., 1996. Economic convergence and economic policies, NBER Working Paper No. 5039.
- Solt, F, 2016, The Standardized World Income Inequality Database
- Stiglitz, J. E., 2012. The price of inequality: How today’s divided society endangers our future. WW Norton & Company.
- Violante, G. L., 2008, ‘Skill-biased technical change’, in Blume, L. and Durlauf, S. (eds.), The new Palgrave dictionary of economics, Palgrave Macmillan.
- World Bank, 2016. Poverty and shared prosperity, taking on inequality.