Pooled mean group estimation for growth, inequality, and poverty triangle: evidence from 124 countries

Abstract

Covering 460 annual observations of 124 countries for the period 2010–2013, the unbalanced panel is examined the long-run relationships between the Growth- Inequality-Poverty (GIP) triangle by using the pooled mean group estimator, which allows short-run dynamics, error correction, and error variance that differ across countries. The results show that income inequality increases poverty head counts, whereas average household income decreases poverty. The results show that 75 countries exhibit pro-poor growth (PPG), 8 countries show antipoor growth, and 41 countries show “immiserizing growth,” whereas a larger share of pro-poor growth episodes among the cross-sections is found in the aggregated panel.