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Abstract


DYNAMICS OF POVERTY AND INCOME INEQUALITY: DYNAMIC PANEL DATA ANALYSIS ON SELECTED EUROPE AND CENTRAL ASIAN COUNTRIES
Poverty, defined as the inability of individuals to meet basic needs, or to lag behind social inclusion, even if they meet basic needs, is also due to lack of resources. Differences in income distribution, between individuals, groups and regions are defined as income inequality. Income inequality is a more comprehensive concept than poverty because it covers the entire population. However poverty and income distribution are both directly and indirectly related to each other. As the unfairness of the income distribution increases, the poverty rate also increases. On the other hand, the improvement in income distribution has positive effects on poverty. There are many factors such as health expenditure, education, employment level, demographic structure, socioeconomic background, income level, inflation and economic crises and globalization affecting the poverty and income distribution. Inequity in income distribution and poverty are among the main problems of both developed and developing countries. In order to increase the level of social prosperity, income should be distributed fairly. The aim of this study, by explaining the relationship between poverty and income distribution and determine the dynamics that form the basis for them. For this purpose, in the selected period 2000-2016, dynamic-panel data analysis are made on poverty and its components in the Europa-Central Asia's upper-middle income group countries. According to the analysis results the relationship between poverty and income inequality was found out positive and statistically significant. The increase of income inequality also increases poverty. In addition to this, it was detected that poverty is affected positively by population density, unemployment rate and exchange rate and affected negatively by national income, inflation and health expenditures. The signal of GINI, National income, unemployment, exchange rate and health expenditures were found meaningful statistically as expected.

Keywords
Poverty, income inequality, panel data analysis, gini, growth.


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