Globalization, political instability and income inequality: The case of Turkey

Globalization is a concept that is frequently used today. Since the 1980s, globalization has affected developed and developing countries politically, socially, culturally and economically. Political instability can be defined as the changing structural conditions along with the instability in the political structure. Political instability has interactions with economic growth, price level, income distribution, external balance and employment. Income distribution shows how the products produced in a country are distributed among the individuals of that country in a certain period of time. These three concepts are actually in constant interaction with each other. The main purpose of this study is to examine the link between globalization, income distribution and political instability, both conceptually and empirically. For this purpose, the relations between globalization, income distribution and political instability for Turkey in the 2002-2021 period are presented within the framework of the VAR model. Looking at the findings of the study, it was seen that political instability was the most influential variable in income inequality after controlling for the effects of other control variables (openness and inflation) in the 2002-2021 period in Turkey. Therefore, it can be said that political stability and equality in income distribution are interconnected for the Turkish economy. In terms of other variables, it has been found that income inequality will decrease as globalization or openness rate and inflation increase. Key Words: Globalization, Political Instability, Income Inequality, VAR Model, Turkey