MODELING OF THE TRIANGLE OF POVERTY, GROWTH AND INEQUALITY
The article deals with the triangle of poverty, growth and inequality proposed by Francois Bourguignon in 2003. This triangle explains the relationship between poverty, growth and inequality in the state, allows to build a model that characterizes the economy of the selected state or group of States (in our case – the EAEU countries). But the triangle has its own specifics, because in the framework of this study it is necessary to check whether the triangle is applicable to explain the economic situation in the EAEU countries. Economists working for international organizations (like the world Bank) use the poverty growth inequality Triangle to create poverty reduction strategies that include both steps to reduce inequality and stimulate growth. Economists have used the poverty growth Inequality Triangle to study poverty in both developed and developing countries, including China, Egypt, India, Mexico, and Nigeria. "Poverty" is measured by the absolute number of poor, that is, the proportion of the population below a certain poverty line. "Inequality" (or "distribution") refers to differences in relative income among the entire population. The determining factor is the Gini coefficient. "Growth" is the percentage change in the average level of well-being (for example, income or consumption). When working with real panel data, there is always a problem which model (General regression, fixed or random effects) to choose. The choice between a model with random effects and fixed effects was made using Hausman statistics, by comparing estimates of intra-group regression and regression with random effects
Copyright (c) 2019 Fortus: economic&political researches
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.