Modeling the Dynamics of Inequality and Growth in ECOWAS Using Functional Data Techniques

Thomas M. Menino Convention & Exhibition Center 

Income inequality has long challenged economists, gaining renewed attention after the Great Recession of 2008. Empirical evidence shows that market income inequality, measured by the Gini coefficient, has risen in industrial economies since the mid‑1970s. Prior research offers mixed conclusions on whether inequality promotes, hinders, or weakly relates to economic growth. Using data adapted from Brueckner and Lederman (2018), this study examines the relationship between inequality and GDP per capita growth in ECOWAS countries. Key variables include the Gini coefficient from the SWIID, along with GDP per capita, investment, government consumption, and educational attainment from established international datasets. We estimate models in which growth effects depend on initial income levels. To capture the dynamic evolution of inequality and growth, we integrate Functional Data Analysis (FDA), which models entire trajectories rather than discrete observations. This approach provides deeper insight into how long‑term inequality patterns shape economic performance across countries.

ECOWAS

Functional Data Analysis

Panel Data

Inequality

Gini Coefficient 

Business and Economic Statistics Section