The Relationships between Income Inequality & Savings: A Study on Households in Turkey

Year 2020, Volume: 2 Issue: 1, 370 - 380, 19.01.2020

Ahmet Eren Yıldırım

Abstract

This study aims to investigate the relationship between income inequality and households in the Turkish economy. The issue of income inequality has gained increasing interest throughout the world in recent years. It is thought that the increasing importance of income inequality may be related to the economic growth performance of countries. It is observed that income inequality is high in the countries, which has a fluctuating trend of economic growth. Income inequality can affect economic growth through savings. Some of the savings in economies belong to households. Depending on the relationship between income levels and the marginal propensity of savings of households, economic growth performances of countries may vary. Therefore, income inequality is an important macroeconomic indicator for both developed and underdeveloped countries. In this study, the relationship between income inequality and savings for households in Turkey is analyzed with ARDL bound testing methodology. The findings of this study show that there is a long-term relationship between income inequality and savings. 

Keywords

hane halkı, gelir eşitsizliği, tasarruflar

The Relationships between Income Inequality & Savings: A Study on Households in Turkey

Abstract

This
study aims to investigate the relationship between income inequality and
households in the Turkish economy. The issue of income inequality has gained
increasing interest throughout the world in recent years. It is thought that
the increasing importance of income inequality may be related to the economic
growth performance of countries. It is observed that income inequality is high
in the countries, which has a fluctuating trend of economic growth. Income
inequality can affect economic growth through savings. Some of the savings in
economies belong to households. Depending on the relationship between income
levels and the marginal propensity of savings of households, economic growth
performances of countries may vary. Therefore, income inequality is an important
macroeconomic indicator for both developed and underdeveloped countries. In
this study, the relationship between income inequality and savings for
households in Turkey is analyzed with ARDL bound testing methodology. The findings of this study show that there is a long-term relationship between income
inequality and savings. 

Keywords

households, income inequality, savings

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