INCOME DISTRIBUTION IN AZERBAIJAN AND ITS EFFECT ON ECONOMIC GROWTH

Abstract

The relationship between economic growth and income distribution was first explored by Kuznets in the literature. According to Kuznets' hypothesis, income inequality is lower compared to low income countries. In addition, Kuznets stated that with the economic growth and the increase in per capita national income, income inequality also increased. But in the later stages of growth, income distribution inequality will move towards a decreasing trend. According to the findings, Kuznets expressed the relationship between income distribution and income level as "inverse U-curve". Income distribution is a very important concept in terms of showing how much the individuals in the economy get from the total income. In general, it is curious that economic growth cannot see the positive effect of individuals in society, and individuals demand an increase in their share from income in parallel with growth. In this case, policymakers are required to take initiatives that correct income distribution, especially with the help of the most appropriate macroeconomic tools. All is to help them be stressed as a result of the issue.