another fiscal tool for reducing income inequality.
From the results of our empirical analysis, we can draw the following three conclusions.
First, income inequality has a very negative effect on GDP growth. The negative relationship
between income inequality and GDP growth is strong in low-income countries. In addition, income
inequality has a stronger effect on reducing economic growth in high-fragility countries. The disparity
between high- and low-fragility countries is widening, which means that the lower the income level of
the country, the more income inequality reduces economic growth, and this is very similar to the case
in high-fragility countries.
Second, progressivity is not a major factor in reducing income inequality in low-income countries
or in high-fragility countries. However, financial inclusion helps to reduce income inequality in lowincome
countries and in high-fragility countries. Such trends are stronger in high-fragility countries
than in low-fragility countries, which indicates that financial inclusion is more effective in a country in
which the financial system is relatively weak