Research Paper on The Case of a Prudent Policy Regime: Nonlinear Dynamics of the Development-Inequality Nexus in Emerging Countries

Description

Title: The Case of a Prudent Policy Regime: Nonlinear Dynamics of the Development-Inequality Nexus in Emerging Countries

Abstract: In a panel of 15 emerging markets between 1985 and 2019, this study examines the nonlinear dynamic impact of economic development on income inequality under a prudential policy regime. More importantly, we aim to advance the ongoing discussion on this issue, which has its origins in the seminal work by Kuznets and many others, and add a twist by introducing a distinction between a prudential regime (1985–1999) and a non-prudential regime (2000–2019), as well as the threshold level at which economic development reduces inequality. We do this by using Panel Smooth Transition Regression (PSTR). To support our initial findings, fixed-effect models and the Generalized Method of Moments will be used. The PSTR model was chosen because it can handle characteristics like endogeneity, homogeneity, cross-country variability, and time instability within the model that cannot be taken into account by dynamic panel techniques. The threshold above which economic development reduces inequality in some countries was found to be US$13,800, and this further confirms the Kuznets inverted U-shape in both regimes. We found evidence of a non-linear relationship between the two variables. It was discovered that macroprudential policies cause relationships between inequality and development. Our research largely supports the idea that before implementing macroprudential policies, policymakers should develop strategies to draw in investment, which will then lead to the creation of job opportunities and an improvement in the standard of living.

Keywords: economic development; emerging markets; income inequality; PSTR model; prudential policies

Paper Quality: SCOPUS / Web of Science Level Research Paper

Subject: Economics

Writer Experience: 20+ Years

Plagiarism Report: Turnitin Plagiarism Report will be less than 10%

Restriction: Only one author may purchase a single paper. The paper will then indicate that it is out of stock.

What will I get after the purchase?

A turnitin plagiarism report of less than 10% in a pdf file and a full research paper in a word document.

In case you have any questions related to this research paper, please feel free to call/ WhatsApp on +919726999915