Özet:

The implementation of liberal economic policies in developing countries has increased the interaction between trade and economic growth. This development emerges as an important mechanism that leads to a significant increase in income disparities. This study, it is aimed to examine the relationship between income inequality and trade openness with the Panel Var analysis method, using the data between 1992-2019 for the BRICS-T countries, which are expressed as the world's emerging economies. According to the analysis findings, the increase in trade openness causes an increase in income inequality in the selected developing country group. But, the increase in foreign direct investments and economic growth has a reducing effect on the injustice in income distribution. Granger causality test results support the panel VAR results, and trade openness without a feedback relationship is a one-way cause of income inequality. It also has bidirectional causality with income inequality, foreign direct investment and economic growth. Finally, FDI and trade openness are one-way drivers of economic growth. Consistent with the literature, this study supports the hypothesis that liberalization policies in trade, especially in developing countries, increase income inequality. Policies should be developed to attract more foreign investors, both to ensure economic growth and to contribute to reducing income inequality.

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