Investigating the Relationship between Economic Complexity and Income Inequality in Iran (Simultaneous Equations Approach)

Hasanvand, Ali; KARIMI, MOHAMMAD SHARIF; Falahati, Ali; KHANZADI, AZAD

doi:10.22055/jqe.2022.38495.2404

Document Type : Article-Based Dissertations

Authors

¹ PhD Student in Economic Development and Planning, Department of Economics, Faculty of Social Sciences, Economics and Entrepreneurship, Razi University, Kermanshah, Iran.

² Associate Professor, Department of Economics, Faculty of Social Sciences, Economics and Entrepreneurship, Razi University, Kermanshah, Iran.

³ Assistant Professor, Department of Economics, Faculty of Social Sciences, Economics and Entrepreneurship, Razi University, Kermanshah, Iran.

https://doi.org/10.22055/jqe.2022.38495.2404

Abstract

One of the main features and key to success of many countries in today's world is the use of knowledge in economic processes. Because knowledge is one of the most important components for determining long-term economic growth, investing in knowledge has increased the production capacity of other factors of production such as capital, natural resources and labor, and facilitates the efficient conversion of production inputs into production processes and new products. Achieving quality economic growth in the form of economic growth along with reducing income inequality is one of the most important economic issues today. Economic complexity is one of the concepts that implies the role of knowledge in production and in addition to economic growth plays an important role in changing income inequality. Accordingly, the present study uses the simultaneous equation approach to examine the relationship between income inequality and economic complexity for the period 1397-1374. The results show that increasing income inequality has increased economic complexity, but economic complexity has reduced inequality In addition, there is evidence that industrialization, human capital, and GDP lead to increased economic complexity. In addition, industrialization has reduced income inequality, and the Kuznets curve hypothesis on the relationship between GDP and income inequality has been confirmed. Increasing the quality of education, industrial development, and focusing on policies to increase GDP are among the effective policies for enjoying the benefits of economic complexity.

Keywords

Main Subjects

Public sector economy and Fiscal institutions

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Investigating the Relationship between Economic Complexity and Income Inequality in Iran (Simultaneous Equations Approach)

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Volume 21, Issue 2 - Serial Number 81Vol. 21, No. 2, summer 2024August 2024Pages 201-222

Volume 21, Issue 2 - Serial Number 81
Vol. 21, No. 2, summer 2024
August 2024
Pages 201-222