THE RELATIONSHIP OF ECONOMIC GROWTH, FINANCIAL DEVELOPMENT AND INCOME INEQUALITY IN ASEAN-5 COUNTRIES

In the study, it is investigated the relationship between economic growth, financial development and income inequality in ASEAN-5 (Indonesia, Malaysia, Thailand, Philippines, Singapore, Vietnam) countries for the period between 1992-2014. It is utilized the second-generation tests, which takes into account the cross-sectional dependence. The findings of the analyzes show that economic growth has a positive effect on income inequality in ASEAN-5 countries and the effect of financial development on income inequality is not statistically significant. On the other hand, it is seen that the country specific results are different. According to the results of Dumitrescu-Hurlin causality, it is seen that there is a one-way causality relationship from economic growth to income inequality and financial development. In line with the results of analysis, it is evaluated that bringing the financial structures of ASEAN-5 countries in line with international standards and directing financial resources to areas to be used efficiently can have a positive effect on economic growth and a negative effect on income inequality.