Re-examining the relationship between economic growth and inequality in the New Member States

The link between income inequality and economic growth has raised many debates in the literature and has generated a large spectrum of results over time. This paper aims at analyzing the relationship between economic growth and income inequality, as well as their macroeconomic and institutional determinants in the New Member States, between 2000 and 2009. In the presence of a set of explicative variables, the economic growth influences the social inequality through a U-shaped relationship. Health, education and gross capital formation generate different direct and indirect effects on income inequality as the per capita GDP growths, while the transition indicators are found to be either common or specific determinants of inequality and growth.