Economic Growth and Disparity Issues in Income and Education: A Causal Enquiry on ASEAN Countries

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Azfar Hilmi Baharudin
Rosmah Abd. Ghani@Ismail
Nor Hamiza Mohd Ghani


Using alternative method to the standard Granger causality approach, this paper intends to shed light on causality relationships which have not been explored before, as well as provide rigour to some pre-established causal linkages. In particular, this paper lends empirical insight to the literature by examining causal linkages among economic growth, income inequality and education inequality. Data for several ASEAN countries are analysed using Toda-Yamamoto Granger Causality test. Several lag specifications were considered and the appropriate model was selected based on various diagnostic measures. The results revealed a unidirectional causality from income inequality to economic growth. Test procedures failed to find any evidence of causality between economic growth and education inequality as well as between education inequality and income inequality despite various empirical findings in other studies suggesting some form of connection among the variables.


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