58 58 THE IMPACT OF ECONOMIC GROWTH AND TRADE OPENNESS ON INCOME INEQUALITY: AN EMPIRICAL ANALYSIS FOR TURKISH ECONOMY 1 Davuthan GÜNAYDIN 1 , Murat ÇETİN 2 1 Namık Kemal University, Department of Labor Economics and Industrial Relations, Tekirdağ / Turkey 2 Namık Kemal University, Department of Economics, Tekirdağ / Turkey Abstract: Kuznets curve hypothesis suggests that there is an inverted-U shaped relation between economic growth and income inequality. This study aims to investigate the validity of the Kuznets curve hypothesis in the sample of Turkey. This study also examines the impact of trade openness on income inequality. We use Johansen-Juselius cointegration method and Granger causality test based on vector error correction model (VECM) to test the relationships among economic growth, trade openness and income inequality. Empirical results reveal that the series used in this study are stationary at first difference. Empirical results also reveal that there is a long run relationship between the variables. This study shows evidence that the Kuznets curve hypothesis is valid for Turkish economy in the long run. This study also found out that trade openness de- creases income inequality in the long run. Finally, the long run causality running from economic growth and trade openness to income inequality was detected. The results can provide some policy implications related with income inequality. Key Words: Income Inequality, Economic Growth, Trade Openness, Cointegration, Causality, Turkey (1) Corresponding Author: Davuthan GÜNAYDIN, Namık Kemal University, Faculty of Economics and Administra- tive Sciences, Departmant of Labor Economics and Industrial Relations, Tekirdağ / Turkey dgunaydin@nku. edu.tr Arrival Date 16.07.2015 Date of Admission: 14.10.2015 Article Type: (Research and Practice) Conflict of Interest No “Ethics Committee No” Doi: 10.17364/IIB.20152013533 IIB INTERNATIONAL REFEREED ACADEMIC SOCIAL SCIENCES JOURNAL