Abstract
ABSTRACT This paper explores the relationship between economic growth and income inequality by observing a set of 11 Central and Eastern European (CEE) countries during the period 1994 to 2020. We employ panel cointegration techniques in order to capture the common long-term dynamics of the CEE countries while not imposing equality on the short-run coefficients. Generally, it is found that there exists a monotonically decreasing growth-inequality link, contradicting Kuznets’ theory for emerging economies. However, in the short-run, several heterogeneities are found at the cross-country level, implying a diffuse pattern of this association, including an inverted-U-shaped relationship or a linear but insignificant relationship.
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