Measuring income inequality between countries and analysis of factor affecting on Growth (spatial Econometric approach)

The economic growth gap between countries is one of the most important economic realities, and it is important to recognize the main causes. In this regard, the present study uses the statistical evidence of 91 countries over 2003-2007 and the analysis of the spatial theil index to estimate the components of the economic growth gap of countries. The results show that the share of neighborhood effects in determining the economic growth gap is more than the share of productivity difference. Also, the share of spatial effects in the growth difference of European countries and the share of productivity difference in the growth difference of Asian countries has been higher than other factors. In addition, the economic growth of European countries is convergent and Asian countries are divergent. According to the estimated model by GMM approach, industrialization is one of the main factors for the difference in economic growth of countries. Therefore, with the development of industry and increasing productivity, Iranian economy can be to converge to the top economies.