The economic growth and income inequality: The case study of Colombia

Bachelor of Science Ricardo Alberto Cárdenas Muñoz

Master's thesis

Abstract:

This Diploma Thesis goes beyond the common confrontation about economic growth and economic development and propose an analytical Pro-Poor method based on inequations that allows the author to provide an answer to the formulated question, which looks for analyse if the growing economic growth and growing inequality in terms of Gini index produced benefits to the poorest population of the 24 metropolitan areas of Colombia. This determination is carried out using the median incomes for both the richest and the poorest segment of the studied population; this research proposes the creation of a new variable call income which unify not only wages but other extra incomes and fill the missing values using the fitted values of a lineal regression under the Mincer Model. The author found that the economic growth from 2017 to 2019 and the increase of Gini index in Colombia was no neither pro-probe nor pro-rich under any approach, and the inequality increased even when the richest segment of the studied population reduces their median incomes in percentual terms. The author also found that the financial sector is growing faster than the industrial and agricultural sectors, causing financialization, which, along with neoliberalism, has caused low economic growth and increased inequality.

Keywords

Growth, Inequality, Por-Poor, Poverty, Financialization, Development, Income, Colombia

Language used: English

Date on which the thesis was submitted / produced: 3. 4. 2023

Thesis defence

• Date of defence: 22. 5. 2023
• Supervisor: doc. Ing. Irena Benešová, Ph.D.
• Reader: Monika Hrstková, externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management