The Effect of Income Inequality on Private Consumption: The Case Study of MENA Countries

اقتصاد پولی مالی

Article 9, Volume 17, Issue 34, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i34.27359

Authors

Behzad Salmani^* ; Hossein Asgharpur; Ali Dehghani; Majid Feshari

Abstract

The investigation of income inequality effect on private consumption is considered as an important issue in macroeconomic literatures.
Hence the main objective of this paper is to study the effect of income inequality on private consumption in MENA countries during the (1975-2006). For this purpose, the modified Qin et al. (2009) model has been estimated by panel data approach.
The main findings indicate that, income inequality and real interest rate have negative and significant and per capita income has positive and significant effects on private consumption, respectively. Accordingly, the main implication policy of this paper is that, policy makers of this countries should be decrease income inequalities and adopts re-distribution policies such as transfer payment and subsidies in order to increase the private consumption

Keywords

Private Consumption; Income inequality; MENA