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Article

Further Evidence on Import Demand Function and Income Inequality

Centre of Planning and Economic Research, 11 Amerikis Street, 106 72 Athens, Greece
Economies 2020, 8(4), 91; https://doi.org/10.3390/economies8040091
Received: 21 July 2020 / Revised: 30 September 2020 / Accepted: 15 October 2020 / Published: 23 October 2020
(This article belongs to the Special Issue Trade and Investment Policy and Global Value Chains)
In advanced economies, rising inequality has become a significant economic issue. Our paper examines one dimension of the impact of inequality. This study employs panel estimators that tackle heterogeneity and cross-sectional dependence to estimate the impact of income inequality on import demand. In addition, we use a Bayesian approach to the cointegrated VAR model as well as a model that allows for stochastic trends and cross-sectional dependence. Annual panel data for the period from 1995 to 2016 on OECD countries are used. The empirical results show that inequality has a positive and significant effect on import demand. The estimation also yields some other expected results, viz. that the income and price elasticity of import demand function are positive and negative, respectively. View Full-Text
Keywords: import demand; income inequality; cross-sectional dependence; system GMM; panel cointegrated VAR import demand; income inequality; cross-sectional dependence; system GMM; panel cointegrated VAR
MDPI and ACS Style

Konstantakopoulou, I. Further Evidence on Import Demand Function and Income Inequality. Economies 2020, 8, 91. https://doi.org/10.3390/economies8040091

AMA Style

Konstantakopoulou I. Further Evidence on Import Demand Function and Income Inequality. Economies. 2020; 8(4):91. https://doi.org/10.3390/economies8040091

Chicago/Turabian Style

Konstantakopoulou, Ioanna. 2020. "Further Evidence on Import Demand Function and Income Inequality" Economies 8, no. 4: 91. https://doi.org/10.3390/economies8040091

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