Income Inequality and the Business Cycle: A Threshold Cointegration Approach
Posted: 1 Oct 2009
Abstract
This paper investigates the impact of various socio-economic variables on various cohorts of the income distribution. We use asymmetric cointegration tests to show that unemployment and immigration shocks have real impacts on income inequality. In addition, using threshold test results we are able to show that positive and negative shocks to the economy do not have symmetric effects nor do the impacts of these shocks impact income quintiles uniformly.
Keywords: Income inequality, Granger causality, Asymmetric cointegration
JEL Classification: I32, I39
Suggested Citation: Suggested Citation
Hoover, Gary A. and Giedeman, Daniel and Dibooglu, Sel, Income Inequality and the Business Cycle: A Threshold Cointegration Approach. Economic Systems, Vol. 33, No. 3, 2009, Available at SSRN: https://ssrn.com/abstract=1480579
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