Time Series Correlation of GINI and GDPby Giulio Ungaretti, Johannes Beil, Katrine Rasmussen and Marina Hesselberg

Economic growth and inequality

???Theory

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Data Available

• Data from datamarket.com (World Bank time series data)

• Number of countries: 236

• Range of years: 1990-2010

• Number of data points for GDP: 4956

• Growth calculated from the GDP data points

• Number of data points for GINI: 852

Data Consideration

Searching for Correlations

Low growth !Pearson corr: 0.03 +/- 0.1 Probability: 2 %

Middle growth !Pearson corr: -0.09 +/- 0.32 Probability: 22 %

High growth !Pearson corr: -0.30 +/- 0.25 Probability: 78 %

Results

Pearson corr: -0.18 +/- 0.18 Probability: 69 %

Pearson corr: 0.09 +/- 0.32 Probability: 22 %

Pearson corr: 0.43 +/- 0.42 Probability: 71 %

Conclusions

• GDP and GINI are correlated for subsets of countries

• Correlations between equality and growth are strongest regional

• Sociology is hard