GDP corrected with income inequality as the measure of economic growth
DOI:
https://doi.org/10.15584/nsawg.2024.1.1Keywords:
GDP per capita, inequalities of incomes, EU countriesAbstract
The aim of the article is to develop a method for correcting GDP per capita using measures of income inequality. The amount of GDP per capita obtained in this way, adjusted by measures of income inequality, allows for comparison of EU countries in terms of the amount of this new measure. Determining five groups of countries and indicating how the GDP per capita relations between them have changed before and after taking into account inequality is an important added value of this article. The time range covered the years 2005–2020. The spatial scope included the EU countries, i.e. the 28 member states that were in the EU at that time. Statistical material was obtained from Eurostat and OECD databases. The main hypothesis can be summarised as the statement that income inequality has an impact on economic development, as measured by the GDP growth rate. To illustrate and verify the hypothesis, statistical methods were used: examining variability, correlation, verification of variables, as well as methods of logical analysis and examining cause-and-effect relationships. The general conclusions of the study indicate that the presented method of correcting GDP per capita is a solution, but it does not exhaust all the issues and problems associated with taking into account income inequality in GDP estimates. Moreover, interesting conclusions in the application sphere appear when the new GDPN(d) measure is used to isolate and compare groups of member countries, because the country rankings changed after correcting the GDP for inequalities.
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