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This paper addresses the specification of the econometric models used in the paper “Level of Development, Rate of Economic Growth, and Income Inequality” by Jih Y. Chang and Rati Ram (2000). We find that when accounting for regional heterogeneity, the Kuznets hypothesis no longer holds, and low growth countries no longer have a higher degree of income dispersion over all levels of income than high growth countries.
Response to this article by Jih Y. Chang and Rati Ram: Response to Edwards and McGuirk: Income Level, Economic Growth, and Inequality: Flawed Methodology and Inaccurate Inference (EJW, August 2004).