Ecuador: Income Inequality, Economic Growth and Kuznets Curve

This article aims to demonstrate the existence or not of the fulfillment of the empirical hypothesis in the form of an inverted U of the Kuznets curve in Ecuador. The methodology is econometric with the application of Autoregressive Models of Distributed Lags (ARDL). The relationships between economic growth (independent variables) and the Gini coefficient (dependent variable) are estimated in the short and long term. The study period includes from 1990 to 2016, two variants of the proposed model are considered: population and unemployment. The results show a direct relationship between the variables of economic growth and income inequality in Ecuador in the short term, unlike the long term the relationship is inverse, explaining compliance with the hypothesis studied. The conclusions are established based on the economic decisions that have boosted economic growth and the effects on the income levels of the economy, relying on schooling and employability indicators.