THE INCOME GAP BETWEEN ADVANCED, EMERGING, AND DEVELOPING ECONOMIES: EVIDENCE FROM PANEL DATA

Abstract

The sustainability of the global economic growth poses the grave challenge for policymakers, academia and business. The main objective of the study was evaluation of income differences across the country groups over 2001-2024 period. The results point on statistically significant income differences between the country groups of GN and BRICS+ and GS, however not between the BRICS+ and GS. According to results the per capita income in GN countries are 3,3 times higher than in BRICS+ countries on average. In turn the GS countries are about 37% poorer than BRICS+ countries on average, however the result is not statistically significant. Finally pointing on income-growth dynamics across the countries the uneven pattern between the country blocs emerges. The GN countries are characterized by high-low pattern (e..g. high income, low growth); whereas BRICS+ and GS countries are characterized rather by low-moderately strong and low-strong pattern (e.g. low income; higher growth). Whereas the catch-up effect could not be ruled out, it depends about income and wealth redistribution policies in these countries.