Socio-economic inequality and economic growth: Assessing the Kuznets hypothesis using gradient boosting

The issue of the relationship between socio-economic inequality (SEI) and economic growth remains relevant amid global uncertainty and the growing role of state financial regulation (SFR). The study’s relevance stems from the need to clarify the nature of these relationships to develop effective SFR measures, particularly in the context of Russia’s national goals, which include reducing the Gini coefficient by 2030 and 2036. The research aims to refine the impact of SEI levels on economic growth dynamics, with a focus on testing Simon Kuznets’ hypothesis of a nonlinear relationship. The main objectives included systematizing theoretical and empirical approaches, conducting a detailed analysis of SEI influence channels on economic growth rates to develop an econometric model, and verifying the hypothesis of nonlinear relationships between the studied indicators. The methodological foundation relied on the gradient boosting method, applied to panel data from 175 countries over the 2000—2022 period. Results confirmed an inverted U-shaped relationship between economic growth rates and the Gini coefficient for post-tax income, identifying an optimal Gini range (0.35—0.65) for maximum economic growth rates, as well as a G-shaped relationship, suggesting the need to reduce tax burdens in countries with low SEI levels. Conclusions highlight the limited universality of the Kuznets hypothesis and the necessity for a differentiated approach to SFR of SEI. Key recommendations include enhancing income redistribution in countries with low per capita incomes and reducing excessive fiscal burdens in developed economies with low SEI. A theoretical spiral model of the long-term relationship between economic growth dynamics and SEI, accounting for long-term technological cycles, is also proposed. The results hold practical significance for optimizing SFR in Russia.