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Journals / Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2019 / Cilt: 0 - Sayı: 54

CONVERGENCE IN CENTRAL AND EASTERN EUROPEAN COUNTRIES INCOME REDISTRIBUTION: EVIDENCE FROM SPSM METHOD

MERKEZİ VE DOĞU AVRUPA ÜLKELERİNDE GELİR DAĞILIMI YAKINSAMASI: SPSM YÖNTEMİNDEN KANITLAR

Murat BELKE
Süleyman BOLAT
Harun KAYA
Pages
343–366
Publication Date
2022-10-18
DOI
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The results show that income inequality converges even if control is provided for structural breaks, non-linearity, heterogeneity and cross-sectional dependence.

📌 3 Key Takeaways

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Objective & Hypothesis:This study is to investigate whether income inequality in nine Central and Eastern European (CEE) countries are converging or diverging using the nonlinear panel unit root tests Sequential Panel Selection Method (SPSM) over the period 1989 to 2015.
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Key Findings & Data:We used the SPSM procedure that proposed by Chortareas and Kapetanios (2009) using Panel KSS unit root test (developed by Ucar and Omay (2009)) with a Fourier function in this paper.
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Conclusion & Impact:The results show that income inequality converges even if control is provided for structural breaks, non-linearity, heterogeneity and cross-sectional dependence.
🔬Design:Modeling & Simulation
📍Scope:2015 Verileri
⚙️Variables:Domain Parameters

Abstract

This study is to investigate whether income inequality in nine Central and Eastern European (CEE) countries are converging or diverging using the nonlinear panel unit root tests Sequential Panel Selection Method (SPSM) over the period 1989 to 2015. We used the SPSM procedure that proposed by Chortareas and Kapetanios (2009) using Panel KSS unit root test (developed by Ucar and Omay (2009)) with a Fourier function in this paper. The SPSM is a competent method which controls for structural breaks, nonlinearity, heterogeneity and cross-section dependency. The empirical analysis of conventional unit root tests shows that income inequality is stationary or convergence for CEE countries. On the other hand, the empirical results from the SPSM also point out that the income distribution convergence holds true for nine CEE countries in the period of 1989 to 2015. The results show that income inequality converges even if control is provided for structural breaks, non-linearity, heterogeneity and cross-sectional dependence. Countries converge to a common level of income inequality. Our findings have some significant policy implications for macroeconomic policy, modelling and forecasting for these CEE countries.

Özet

Çalışma dokuz Merkezi ve Doğu Avrupa (CEE) ülkesinde 1989-2015 döneminde doğrusal olmayan panel birim kök testlerinden Sıralı Panel Seçim Yöntemini (SPSM) kullanarak gelir eşitsizliği yakınsaması mı yoksa gelir dağılımı ıraksaması mı olup olmadığını araştırmaktadır. Çalışmada Fourier fonksiyonlu doğrusal olmayan Panel KSS (Ucar ve Omay (2009) tarafından geliştirilen) kullanarak Chortareas ve Kapetanios (2009) tarafından önerilen SPSM yöntemi uygulanmaktadır. SPSM yöntemi yapısal kırılmalar, doğrusal olmama, heterojenite ve yatay kesit bağımlılığını kontrol edebilmede oldukça yetkin bir yöntemdir. Geleneksel birim kök testleri kullanılarak yapılan analizler CEE ülkeleri için gelir eşitsizliğinin durağan olduğunu yani gelir dağılımının yakınsadığını elde etmiştir. Diğer taraftan Fourier fonksiyonlu SPSM yönteminden elde edilen test sonuçlarında da dokuz CEE ülkesi için 1989-2015 döneminde gelir eşitsizliğinin yakınsaması teyit edilmiştir. Sonuçlar, yapısal kırılmalar, doğrusal olmama, heterojenite ve yatay kesit bağımlılığı için kontrol sağlanması durumunda da gelir eşitsizliğinin yakınsadığını göstermektedir. Ülkeler ortak bir gelir eşitsizliği seviyesine yakınsamaktadır. Elde edilen bulgular makroekonomik politika, modelleme ve öngörü açısından CEE ülkeleri için önemli politika belirleyicilerine sahiptir.

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Cite This Article

BELKE, M., BOLAT, S., KAYA, H. (2022). CONVERGENCE IN CENTRAL AND EASTERN EUROPEAN COUNTRIES INCOME REDISTRIBUTION: EVIDENCE FROM SPSM METHOD. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Cilt: 0 - Sayı: 54, 343–366. https://ajindex.com/articles/503447

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