Analysis of impact of total factor productivity on the interregional income inequality in the regions of Central Federal District

Abstract

Purpose: the aim of article is analysis of quantitative connection between total factor productivity growth rate and interregional income inequality level in regions of Central Federal District. Discussion: in this study, we use Rosstat data on gross regional product, fixed capital investment and employment to estimate total factor productivity growth rate. TFP and index of interregional investment inequality are independent variables in regression, where dependent variable is income inequality entropy index of Theil. This index is the most appropriate because it satisfies the axioms of inequality measurement. Results: Because of our calculation, we identified statistically significant negative relationship between total factor productivity growth rate and interregional income inequality in regions of Central Federal District.