Analysis of Economic Growth and Income Inequality

Analysis of Economic Growth and Income Inequality This is a data mining project to help users understand the relationship between economic growth and income inequality. The .pdf document under the files section provides a comprehensive overview of the project with all the images. Please kindly download the data/code.zip folder to view the datasets and codes which were used for the project. Both datasets were obtained from the World Bank Open Database and were Excel files. The first dataset shows GDP per capita (US $) for all the countries of the world from 1960 to 2017. It will serve as income per person of each country of the world. Similarly, the other dataset is the GDP per capita growth (annual %) which contains the data for all the countries of the world for the same time period, 1960 to 2017. This dataset will be used as an indicator to find the economic growth percentage of each country. For the purpose of this project, the data for the years 2010-2016 were selected and analyzed. Conclusion Income inequality is a global issue. The result of this study revealed that there is no particular relationship between income inequality and economic growth. The impact of income inequality on economic growth is nonlinear as the change in economic growth does not correspond with a constant change in income inequality or vice versa. The relationship between the two seems unpredictable or virtually absent. For the majority of the countries observed in this study, the increase or decrease in income per person and economic growth did not follow a consistent pattern. Pakistan was the only exception. A positive correlation was observed between the income per person (US $) and economic growth (annual %) of Pakistan since both of those variables were increasing constantly for the years compared, 2010 - 2016. However, it is also important to note that Pakistan is one of the poorest nations of the world, and those increasing numbers or percentages were relatively small