Research Article


DOI :10.26650/JEPR572329   IUP :10.26650/JEPR572329    Full Text (PDF)

Real Interest Rate and its Effect on Income Inequality

Muhammet Sait Bozik

Clarifying the factors for continually increasing income inequality is important to maintain fairness. This study, seeking to fulfil this objective, examines nine developed countries for the period of 2005-2015 and five developing countries for the period of 2003-2013. Utilizing panel data techniques, the study finds that where the price level of per capita investment is dependent variable of income distribution in developing countries, it exhibits a 5 pct-significance correlation. The real interest rate has no significant effect upon the income distribution variable. In developed countries, the human capital and real interest rate variable has a significant effect upon income distribution. Increase in human capital makes the income distribution fairer whereas increase in the real interest rate disrupts income equality.


JEL Classification : E43 , J24 , D63
DOI :10.26650/JEPR572329   IUP :10.26650/JEPR572329    Full Text (PDF)

Reel Faiz Oranı ve Gelir Eşitsizliği Üzerindeki Etkisi

Muhammet Sait Bozik

Sürekli artan gelir eşitsizliğinin faktörlerini netleştirmek, adaleti sağlamada etkin olmak açısından önemlidir. Bu amaç doğrultusunda yapılan bu çalışma, 2003-2013 yılları arası gelişmekte olan 5 ülke ve 2005-2015 yılları arası gelişmiş 9 ülkeyi incelemektedir. Panel veri teknikleri kullanılarak yapılan çalışmada gelişmekte olan ülkelerde kişi başı yatırımın fiyat seviyesi gelir dağılımı değişkeninin bağımlı değişken olduğu durumda %5 düzeyinde anlamlı bir ilişkiye sahiptir. Reel faiz oranı değişkeni ise gelir dağılımı değişkeni üzerinde anlamlı bir etkiye sahip değildir. Gelişmiş ülkelerde ise beşeri sermaye ve reel faiz oranı değişkeninin gelir dağılımı üzerinde anlamlı bir etkisi vardır. Beşeri sermayede meydana gelecek artış gelir dağılımı adaletini daha adaletli hale getirmekte iken reel faiz oranında meydana gelen artış gelir dağılımı adaletini bozmakta daha adaletsiz kılmaktadır.


JEL Classification : E43 , J24 , D63

PDF View

References

  • Aydın, M. (2016). Gelir dağılımındaki adaleti sağlamada zekat müessesesi ve gini katsayısı. Akademik Bakış Dergisi, 57(2), 55-72. google scholar
  • Baltagi, B. H. (2005). Econometric analyses of panel data. Chichester: John Wiley. google scholar
  • Baltagi, B. H., & Li, Q. (1991). A joint test for serial correlation and random individual effects. Statistics and Probability Letters, 11(3), 277-280. google scholar
  • Battisti, M., Fioroni, T., & Lavezzi, A. M. (2014). World Interest Rates, Inequality and Growth: an empirical analyses of the Galor-Zeira Model. Paper presented at the Dipartimento di Economia e Management, University of Pisa. google scholar
  • Bayındır, S., & Şimşek, H. (2019). Geç dönem İslam fakihlerinin faiz yasağının kökeni ve sürekliliğine ilişkin görüşlerine analitik bir bakış. In M. Ustaoğlu & A. İncekara (Eds.), Faiz Meselesi - Tarihte Örnek Uygulamalar (pp. 233-244). İstanbul: İstanbul Bilgi Üniversitesi Yayınları. google scholar
  • Berisha, E., Meszaros, J., & Olson, E. (2018). Income inequality, equities, household debt and interest rates: evidence from a century of data. Journal of International Money and Finance, 80, 1-14. google scholar
  • Breusch, T. S., & Pagan, A. R. (1979). A simple test for heteroscedasticity and random coefficient variation. Econometrica, 47(5), 1287-1294. google scholar
  • Brückner, M., Gerling, K., & Grüner, H. P. (2010). Wealth inequality and credit markets: evidence from three industrialized countries. Journal of Economic Growth, 15(2), 155-176. google scholar
  • Çetin, B. I., & Gün, M. (2013). Türkiye’de 2002-2009 yılları arasında gelir bileşenleri ve gelir eşitsizliğinin analizi. Çalışma ve Toplum Dergisi, 1, 253-292. google scholar
  • Chapra, M. U. (2016). Islam and the economic challenge: The Islamic Foundation. google scholar
  • Charles-Coll, J. A. (2011). Understanding income inequality: concept, causes and measurement. International Journal of Economics and Management Sciences, 1(3), 17-28. google scholar
  • Conard, J. W. (1959). An introduction to the theory of interest. Berkeley: University of California. google scholar
  • Dağdemir, Ö. (1998). Ekonomik kalkınma sürecinde gelir eşitsizliği sorunu ve makroekonomik göstergeler. Ekonomik Yaklaşım, 9(30), 41-59. google scholar
  • Diebold, F., & Yılmaz, K. (2012). Better to give than to receive: predictive directional measurement of volatility spillovers. International Journal of Forecasting, 28(1), 57-66. Dillard, D. (1957). The economics of John Maynard Keynes: The theory of monetary economy. New Jersey: Prentice-Hall Inc. google scholar
  • Durbin, J., & Watson, G. S. (1971). Testing for serial correlation in least squares regression. Biometrika, 58(1), 1-19. google scholar
  • Ergin, F. (1981). Para ve faiz teorileri. İstanbul: İ.Ü. İktisat Fakültesi Yayınları. google scholar
  • Feenstra, R., Inklaar, R., & Timmer, M. (2015). The next generation of the Penn World Table. American Economic Review, 105(10), 3150-3182. google scholar
  • Frees, E. W. (1995). Assessing cross-sectional correlation in panel data. Journal of Econometrics, 69, 393-414. google scholar
  • Friedman, M. (1937). The use of ranks to avoid the assumption of normality implicit in the analysis of variance. Journal of the American Statistical Association, 32, 675-701. google scholar
  • Galli, R., & Hoeven, R. v. d. (2001). Is inflation bad for income inequality: The importance of the initial rate of inflation. ILO Employment Paper, 29, 1-40. google scholar
  • Galor, O., & Zeira, J. (1993). Income Distribution and Macroeconomics. The Review of Economic Studies, 60(1), 35-52. google scholar
  • Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1), 1-28. google scholar
  • Lancastre, M. (2016, 2018). Inequality and real interest rates, Germany. google scholar
  • Maraşlı, O. (2016). Interest and social justice: the impact of real interest rate on income inequality. İslam Ekonomisi ve Finansı Dergisi, 1, 77-118. google scholar
  • Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. Cambridge Working Papers in Economics, 435. google scholar
  • Philippon, T. (2015). Has the U.S. finance industry become less efficient? On the theory and measurement of financial intermediation. American Economic Review, 105(4), 1408- 1438. google scholar
  • Piketty, T. (2018). Yirmi birinci yüzyılda kapital. İstanbul: Türkiye İş Bankası Kültür Yayınları google scholar
  • Rousseau, J. J. (2016). İnsanlar Arasındaki Eşitsizliğin Kaynağı: Say Yayınları. google scholar
  • Siddiqi, M. N. (2002). The wisdom of prohibition of interest. Paper presented at the LaRiba, Los Angeles. google scholar
  • Şimşek, H., Bayındır, S., & Ustaoğlu, M. (2017). Dual banking systems’ dynamics and a brief development history of Islamic finance in select emerging Islamic economies. In M. Ustaoğlu & A. İncekara (Eds.), Balancing Islamic and Conventional banking for economic growth: empirical evidence from emerging economies (pp. 9-24). Switzerland: Palgrave Macmillan. google scholar
  • Solt, F. (2016). The standardized World Income Inequality database. Social Science Quarterly, 97(5), 1267-1281. google scholar
  • Sugözü, İ. H., Erdoğan, S., & Ulaşan, E. (2017). The impacts of interest expenditure on income distribution and an application on the factors distorting income distribution: an empirical analyses for Turkey. Turkish Studies, 12(12), 231-250. google scholar
  • World Bank. (2019). World development indicators. Retrieved from: https://databank.worldbank.org/reports. aspx?source=2&series=FR.INR.RINR&country= google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Bozik, M.S. (2019). Real Interest Rate and its Effect on Income Inequality. Journal of Economic Policy Researches, 6(2), 107-120. https://doi.org/10.26650/JEPR572329


AMA

Bozik M S. Real Interest Rate and its Effect on Income Inequality. Journal of Economic Policy Researches. 2019;6(2):107-120. https://doi.org/10.26650/JEPR572329


ABNT

Bozik, M.S. Real Interest Rate and its Effect on Income Inequality. Journal of Economic Policy Researches, [Publisher Location], v. 6, n. 2, p. 107-120, 2019.


Chicago: Author-Date Style

Bozik, Muhammet Sait,. 2019. “Real Interest Rate and its Effect on Income Inequality.” Journal of Economic Policy Researches 6, no. 2: 107-120. https://doi.org/10.26650/JEPR572329


Chicago: Humanities Style

Bozik, Muhammet Sait,. Real Interest Rate and its Effect on Income Inequality.” Journal of Economic Policy Researches 6, no. 2 (Mar. 2024): 107-120. https://doi.org/10.26650/JEPR572329


Harvard: Australian Style

Bozik, MS 2019, 'Real Interest Rate and its Effect on Income Inequality', Journal of Economic Policy Researches, vol. 6, no. 2, pp. 107-120, viewed 28 Mar. 2024, https://doi.org/10.26650/JEPR572329


Harvard: Author-Date Style

Bozik, M.S. (2019) ‘Real Interest Rate and its Effect on Income Inequality’, Journal of Economic Policy Researches, 6(2), pp. 107-120. https://doi.org/10.26650/JEPR572329 (28 Mar. 2024).


MLA

Bozik, Muhammet Sait,. Real Interest Rate and its Effect on Income Inequality.” Journal of Economic Policy Researches, vol. 6, no. 2, 2019, pp. 107-120. [Database Container], https://doi.org/10.26650/JEPR572329


Vancouver

Bozik MS. Real Interest Rate and its Effect on Income Inequality. Journal of Economic Policy Researches [Internet]. 28 Mar. 2024 [cited 28 Mar. 2024];6(2):107-120. Available from: https://doi.org/10.26650/JEPR572329 doi: 10.26650/JEPR572329


ISNAD

Bozik, MuhammetSait. Real Interest Rate and its Effect on Income Inequality”. Journal of Economic Policy Researches 6/2 (Mar. 2024): 107-120. https://doi.org/10.26650/JEPR572329



TIMELINE


Submitted31.05.2019
Accepted20.06.2019

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.