The Role of Income Inequality as a Predictor of Per Capita Gross Domestic Product

The role of income inequality in relation to gross domestic product is of great importance in modern time. Income inequality is a pressing phenomenon in the fields of economics, politics, and sociology, while Gross Domestic Product is the benchmark statistic in measuring the health of any economy. But how well does income inequality serve as a predictor for the level of Purchasing Power Parity (PPP) GDP per capita within a nation? This cross-sectional study determines that the GINI Index has no significant statistical relationship with PPP GDP per capita level. While income inequality is a major economic variable that contributes to the economic stature of a nation, this study argues that the applied data set and methodology in cross-sectional study conceded an insignificant relationship. This study recognizes the complexity of income inequality and argues that it may contribute to economic growth in a number of indirect ways.