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How does inequality affect growth? Evidence from a panel of Canadian regions

TitleHow does inequality affect growth? Evidence from a panel of Canadian regions
Year of Publication2019
AuthorsMarchand, Y., Breau S., and Essletzbichler J.
JournalCanadian Journal of Regional Science
Volume42
Pages130 - 139
Abstract

This paper investigates the effects of income inequality on regional economic growth in Canada over the 1981 to 2011 period. Using standard cross-sectional models, the consistent pattern we find is that regions with initially higher levels of inequality do subsequently experience greater average annual growth rates over the long-run. In contrast, the medium-term responses are different. Results from fixed effects models point to a negative relationship between inequality and growth. Moreover, across both types of models, we find significant differences for urban and rural regions.

URLhttp://www.cjrs-rcsr.org/Volume42-2.htm
Document URLhttp://www.cjrs-rcsr.org/V42/cjrs_rcsr42-2_5How(Marchand_Breau_Essletzbichler).pdf