Spatial Analysis of Income Inequality, Poverty and Economic Growth in the Euro-Med Zone

There is an extensive literature on the impact of inequality and poverty on economic growth and vice versa. However, the triangle relationship among these three variables can be debatable. Income inequality is generally seen to affect long-term economic growth, although there is no consensus on the direction of the effect. Also, based to Kuznets hypothesis, inequality is affected by growth and this is a u-inverse relation. As well as inequality, poverty is one of the important variables affecting growth, and would be affected by growth. This study tries to consider these relations, interactively. According to the observation types, these relations can be defined through spatial econometric techniques for considering neighboring effects. For this purpose, we analyze spatial relations between poverty, income inequality and economic growth in Euro-Mediterranean countries. The results show that growth and inequality have spatial dependence and neighbors of each country can influence its economic growth and inequality. The relationship between economic growth and poverty is bilateral, while growth-poverty and poverty-inequality relations are one-way