An Empirical Investigation on Growth and Equity

While the theoretical debate on growth or efficiency versus equity continues, this projects aims to provide an empirical study on the factors that determine growth and equity. The PI has previously studied the importance and relevance between openness factors and domestic factors on economic growth using data from 122 world economies and 34 explanatory variables. This project extends the previous study and looks at the twin problems of economic growth and equity. The first task is to compile the relevant data for as many world economies as possible, with the intention to identify and examine the factors that determine growth and equity between typically advanced and developing countries. There can be four permutations in each group of economies. No problem will arise if the same factors that promote (do not promote) growth and contribute (do not contribute) to equity. Problem arises when the effects of the factors to growth and equity contradict each other. An optimal level of the factors will have to be identified and relevant policy implications will be discussed. The empirical results will add vigour to the “growth vs equity” debate. The hypothesis is that growth and equity are determined separately by different factors in advanced and developing economies. When those factors whose effects on growth and equity contradict each other are identified, the search for an optimal level will minimize their opposing outcomes.