LAUSR

The importance of knowledge in the economy is so notable that many economists consider its role even stronger than the traditional production factors such as labor forces and capital. Term of knowledge-based economic represents the significance of the mentioned issue. Hence, identification of the components of knowledge economy and its influence on macroeconomic variables can be a step forward to highlight its role in the economy.The present study investigates the effect of the components of the knowledge-based economy on income inequality during 1995–2012, in a selection of the Islamic countries. Therefore, using panel data model, the effect of variables such as education, innovation, information and communication technology (ICT), and institutional regimes of income inequality was studied. There was a significant and positive effect for the components of knowledge, index of institutional economic regimes; positive but insignificant effect for innovation and creativity index; negative and significant effect for the index of education; and negative and insignificant effect for ICT on income inequality in the selected Islamic countries.