Income inequality and household debt: a cointegration test

Edmond Berisha, John Meszaros, Eric Olson

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

This article employs the Johansen and Engle–Granger methodology to determine if there is a cointegrating relationship between household debt and income inequality as measured by Atkinson, Piketty and Saez (2011). The results suggest a cointegrating relationship between the two series. A vector error correction model is estimated showing that a shock to household debt has statistically significant effects on income inequality in the United States over the time period 1919–2009.

Original languageEnglish
Pages (from-to)1469-1473
Number of pages5
JournalApplied Economics Letters
Volume22
Issue number18
DOIs
StatePublished - 12 Dec 2015

Keywords

  • cointegration
  • household debt
  • income inequality

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