TITLE:
Course of Income Inequality in Turkey
AUTHORS:
Fazıl Kayıkçı
KEYWORDS:
Poverty, Inequality, Income Distribution, Growth, Development
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.6,
August
29,
2019
ABSTRACT: The simultaneous treatment of growth, inequality and
poverty is useful from a policy perspective in the sense that it enables
decision makers to choose the combination of mutually beneficial policies that
have positive impact on all three variables. Also, public policies tend to
affect inequality mainly indirectly through their impact on growth and poverty.
Turkey, as being one of the developing countries, has high-income inequality
since its Gini coefficient was around 0.40 in last decades according to Turkish
Statistical Institute. Its income distribution has been improving slightly;
however, it is still so much behind the developed countries’ levels.
Inequalities in the wealth distribution can have significant negative impacts
on growth where credit market constraints prevent the poor from making
productive indivisible investments. This can be overcome by the provision of
credit or redistribution of assets by taxes and other interventions. Redistribution
of assets not only causes to increase growth and reduce inequality, but also reduces the poverty directly by insuring the poor against the macroeconomic
shocks or volatilities.