Contrasting Views behind the Iron Curtain Effect of Income Inequality on Economic Growth in Transition Economies

In this research I try to find the effect of income inequality on economic growth in transition economies from Central Eastern Europe (CEE) and the Commonwealth of Independent States (CIS). After dealing with the problem of endogeneity of a lagged dependent variable, I find a positive effect of income inequality on economic growth in transition economies in the first twenty years after the start of their transition. I have also found that some factors have a positive contribution to this effect (like the Liberalization Index) while others have a negative contribution (like enrolment ratios of secondary and tertiary schooling).