In ghana, as in many other developing countries, there exist scanty studies that confirm or otherwise the ekc hypothesis with regards to co 2 emissions as well as the factors that drive co 2 emissions. In the early 1980s interest in the link between income inequality and development declined. The hypothesis was first advanced by economist simon kuznets in the 1950s and 1960s one explanation of such a progression suggests that early in development, investment opportunities for those who have money multiply. Empirical evidence from eu find, read and cite all the research you need on researchgate. The kuznets hypothesis is a popular concept for the improvement of inequality and economic growth in long time. From this estimation, we found a regressing income distribution for the prewar period and a dramatic decrease in inequality between prewar and postwar periods. Findings of a significantly negative coefficient on income and a significantly positive estimate on the quadratic term are commonly taken as evidence supporting the invertedu kuznets curve. First, when it comes to the first half of the twentieth century, a main finding of the recent top income literature is that most of the decline is a capital income phenomenon. April 30, 1901 july 8, 1985 was an american economist and statistician who received the 1971 nobel memorial prize in economic sciences for his empirically founded interpretation of economic growth which has led to new and deepened. The empirical assessment of our hypothesis is presented in section 4. An empirical examination of the environmental kuznets. This paper explores the question of structural transformation and income distribution through the eyes of simon kuznets, the pioneer in such analysis.
They were married in 1929 and had two children, paul and judith. Kuznets curve was an empirical reality, to the point where theorists creating models with income distribution dynamics made sure they were able to replicate a kuznets curve in their models. The ekc hypothesis is examined under two nexus which are gdp, co 2 and. Books by simon kuznets author of toward a theory of. The kuznets paradox keynes called the relationship between aggregate consumption and current disposable income the propensity to consume. The aim of this chapter is to consider a cluster of countries in a comparable situation and to estimate the kuznets curve. Kuznets also held professional appointments in economics and statistics at the university of pennsylvania 193054 and in economics at johns hopkins 195460 and. The study investigates how consumption expenditure is determined by income according to keynes absolute income hypothesis aih for the case of nigeria and thus presents a consumption function for nigeria for the period 1970 to 2011, estimating total household consumption expenditure against total income. His study demonstrated that income inequality widens in the early phase of economic growth and narrows in the later stage of development. This goal was achieved by employing autoregressive distributed lag ardl and utilizing the narayan and narayan 2010 approach to control the multicollinearity problem that. The kuznets curve is a curved image that characterizes the hypothesis that as a countrys economy gets better, the inequality among the peoples income level worsens. Merits and limitations of kuznets curve research papers. The empirical validity of this kuznets curve has been intensively inves. Economic growth and energy regulation in the environmental.
Simon kuznets put forward the hypothesis that relationship between per capita national income and the degree of inequality in income distribution may be of the form of invertedu. The hypothesis is that the environmental quality worsens up to some income levels as the country undergoes the industrialization process. View merits and limitations of kuznets curve research papers on academia. Kuznets ucurve hypothesis suggests that there is a tradeoff between economic development and growth. Traditional economic analysis of the association between development and pollution has largely been framed from the perspective of the environmental kuznets curve ekc hypothesis. Carbon dioxide co 2 emissions have been rising globally and have raised public concern regarding their detrimental effects to human life. In a seminal paper, kuznets 1955 argued that as countries developed, income inequality. Kuznets synonyms, kuznets pronunciation, kuznets translation, english dictionary definition of kuznets. It provides an indispensable background to our augmented kuznets hypothesis which is formulated in section 3. A lack of data for the deforestation area was the reason. It argues that kuznets 1955 paper stands the test of time in that it provides illuminating insights into current phenomena like the evolution of chinese inequality. Abstract this study establishes the existence of a pattern of behavior, between economic growth and environmental degradation, consistent with the environmental kuznets curve ekc hypothesis for 17 organization for economic cooperation and development oecd countries between 1990 and 2012. Introduction the environmental kuznets curve ekc is a hypothesized relationship between various indicators of environmental degradation and income per capita. Kuznets was a member of the research staff of the nber from 1927 to 1961.
It provides an indispensable background to our augmented kuznets hypothesis which is formulated in section 4. There are plentiful studies addressing the environmental kuznets curve ekc hypothesis, where deforestation has been used as a proxy for environmental degradation, given the direct effects of growth on natural capital, in order productive agrarian efforts and policies to be promoted. Using a sample of 80 countries from the 1980s, the author shows that two types of factors explain variations in income inequality. Investigating the environmental kuznets curve hypothesis. In this article, kuznets 1955 claims that economic growth initially raises income inequality in the lower income countries for two reasons. Download unlimited powerpoint templates, charts and graphics for your presentations with our annual plan. For 18911921, a preliminary esti mation was attempted based on 39 selected villages, towns and cities. This is the case where people would say, rich people get rich, while the poor become poorer. Kuznets curve has not survived without its share of critics. In fact, kuznets himself emphasized the fragility of his data among other caveats in his paper. Kuznets and environmental kuznets curves for developing. The original version of the kuznets curve argument relies mainly on kuznets 1955s aer paper called \economic growth and inequality. The average propensity to consume apc is the ratio of.
Recent research has posited that, in advanced economies, there is a positive correlation between income inequality and development. Simon kuznets has 26 books on goodreads with 253 ratings. The aih model was tested by ordinary least squares over the period using data obtained. Pdf testing the environmental kuznets curve hypothesis. Ekc research appeared in the academic literature in the early 1990s, and a number of studies have been undertaken which examine this hypothesis. Investigating the environmental kuznets curve hypothesis in kenya.
Inequality and economic growth in bangladesha diversified. The lack of longitudinal data has forced the use of cross. In this study, the environmental kuznets curve ekc hypothesis is examined for 3 developing countries which are egypt, kenya and turkey for the period between 1971 and 2014. Economic development and income distribution in japan. In lower income countries, economic growth raises income inequality because the gains of growth are restricted to a small group of households due to the urbanrural, formalinformal divides and existing skill gaps. Kuznets curve inverted u curve for powerpoint slidemodel. The study revealed that an increase in energy consumption. Keynes absolute income hypothesis and kuznets paradox. Testing of environmental kuznets curve ekc hypothesis is the most common in environment literature so we also incorporated the real gdp per capita squared term in the. The only currently existing hypothesis was formulated by kuznets 1955.
The primary argument of critics of kuznets hypothesis and its resulting graphical representation is based on the countries used in kuznets data set. Stern department of economics, rensselaer polytechnic institute, troy, ny 12180, usa june 2003 1. The kuznets hypothesis suggests that as development proceeds a country will experience first rising then falling income inequality. The hypothesis is tested using provincial and territorial panel data from 1990 to. A survey soumyananda dinda economic research unit, indian statistical institute, 203, b. The rise and fall of the environmental kuznets curve. The environmental kuznets curve ekc hypothesis advocates a reversed ushaped association between different pollutants and per capita income. In other words, a country experiencing higher levels of gdp per capita should expect rising inequality until a certain threshold is passed and then inequality starts to decline. Kuznets definition of kuznets by the free dictionary.
He gave names to two measures of the sensitivity of consumption to income. This study takes a fresh look at how the structural changes within developing economies lead to an inverted u relationship between income per capita and income inequality. Ekc postulates that speedy growth certainly results in environmental degradation due to glut. By the turn of the century, kanbur 2000 felt that the dominance of the kuznets hypothesis in income distribution research had become counterproductive.
The kuznets hypothesis, that is, inequality first rises and then falls as the economy advances, is often tested by regressing inequality on income and its squared term along with other determinants. Pdf on feb 2, 2017, joanna muszynska and others published kuznets hypothesis of income inequality. Introduction the environmental kuznets curve is a hypothesized relationship between various indicators of environmental degradation and income per capita. Kuznets 1955 explored the historical evolution of income distribution and per capita output. This paper presents an alternative hypothesis why income inequality differs between the countries. The poor low income countries shall never get the benefit of steady economic development process if the model of kuznets hypothesis could not be possible to satisfy. The kuznets hypothesis stimulated a large number of theoretical and empirical studies, which provided more solid theoretical grounds and empirical evidence on the existence of the kuznets curve. Simon kuznetss most popular book is toward a theory of economic growth. A quick survey of the theoretical literature on the kuznets curve following kuznets 1955 pathbreaking study numerous authors in the 1960s and 1970s attempted either to formalize kuznets hypothesis or to check its empirical validity.
The rise, demise, and continued relevance of a socioeconomic law timothy patrick moran1 this paper provides a historical analysis of the changing significance of the most influential statement ever made on inequality and developmentsimon kuznetss inverted ucurve hypothesis. First, the population weight of the urban sector, which kuznets. Investigating the presence of environmental kuznets curve. His books include national income and its composition and economic growth of nations.
The environmental kuznets curve ekc hypothesis postulates an inverted ushaped relationship between different pollutants and economic growth. In the early stages of economic growth degradation and pollution. However, the existing literature analyzes the relationship between income inequality and per capita income, which is, at best, an incomplete measure of the multidimensional process of economic development. Investigating the presence of the environmental kuznets. Simon kuznets, in full simon smith kuznets, born april 30 april 17, old style, 1901, kharkov, ukraine, russian empire now kharkiv, ukrainedied july 8, 1985, cambridge, massachusetts, u. This paper tests for the applicability of the environmental kuznets curve ekc hypothesis at the canadian and provincialterritorial levels using greenhouse gas emissions as an indicator for environmental degradation. Due to limitations of data he used an inequality measure of the ratio of income share of the richest 20 per cent of the population to the bottom 60 per cent of the population known as kuznets ratio.
An appropriate test of the kuznets hypothesis article pdf available in applied economics letters 191. An altemative hypothesis to country income inequality. This article investigates the validity of the environmental kuznets curve ekc hypothesis in developing countries in a nonlinear framework. Using a new unbalanced panel dataset for 71 countries from 1961 to 1992, we present evidence that supports this conjecture.
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