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Inequality and Economic Growth: The Perspective of the New Growth Theories
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This paper analyzed the relationship between inequality and economic growth from two directions, showing that when capital markets are imperfect, there is not necessarily a trade-off between equity and efficiency, and provided an explanation for two recent empirical findings, namely, the negative impact of inequality and the positive effect of redistribution upon growth.Abstract:
We analyze the relationship between inequality and economic growth from two directions. The first part of the survey examines the effect of inequality on growth, showing that when capital markets are imperfect, there is not necessarily a trade-off between equity and efficiency. It therefore provides an explanation for two recent empirical findings, namely, the negative impact of inequality and the positive effect of redistribution upon growth. The second part analyzes several mechanisms whereby growth may increase wage inequality, both across and within education cohorts. Technical change, and in particular the implementation of "General Purpose Technologies," stands as a crucial factor in explaining the recent upsurge in wage inequality.read more
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World and regional employment prospects : halving the world’s working poor by 2010
Stefan Berger,Claire Harasty +1 more
TL;DR: This article presented global and regional estimates of employment, unemployment, low-productivity employment (working poor), output per worker and GDP growth for 2000, with extrapolations to 2010 based on three distinct scenarios.
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Literature review on income inequality and economic growth
Kholeka Mdingi,Sin-Yu Ho +1 more
TL;DR: A critical survey on methodology issues employed in the prior studies is provided and a better methodology is proposed to researchers for future studies to understand the income inequality-growth nexus.
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Productive government spending and its consequences for the growth-inequality tradeoff
TL;DR: In this paper, the effects of productive government spending on the relationship between growth and inequality in an economy subject to idiosyncratic production shocks and heterogeneous endowments were investigated, and tractable closed form solutions describing the equilibrium dynamics were derived.
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How Does Finance Contribute to the Development Process and Poverty Reduction
TL;DR: In this paper, a distinguished group of authors takes stock of the existing state of knowledge in the field of finance and the development process, and each chapter offers a comprehensive survey and synthesis of current issues.
Journal ArticleDOI
From Social Policy to an Open-Economy Social Contract in Latin America
TL;DR: A modern open-economy social contract would extend current social policy in two ways: first, it would be explicitly based on broad job-based growth, and second, politically and economically directed not only at the currently poor but at the near-poor and economically insecure middle-income strata as discussed by the authors.
References
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Report SeriesDOI
Initial conditions and moment restrictions in dynamic panel data models
Richard Blundell,Stephen Bond +1 more
TL;DR: In this paper, two alternative linear estimators that are designed to improve the properties of the standard first-differenced GMM estimator are presented. But both estimators require restrictions on the initial conditions process.
The mechanics of economic development
Abstract: This paper considers the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development. Three models are considered and compared to evidence: a model emphasizing physical capital accumulation and technological change, a model emphasizing human capital accumulation through schooling, and a model emphasizing specialized human capital accumulation through learning-by-doing.
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Legal Determinants of External Finance
TL;DR: The authors showed that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller and narrower capital markets than those with stronger investor protections.
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An Exploration in the Theory of Optimum Income Taxation
TL;DR: In this paper, the authors make the following simplifying assumptions: (1) Intertemporal problems are ignored; (2) the tax system that would bring about that result would completely discourage unpleasant work; and (3) what such a tax schedule would look like; and what degree of inequality would remain once it was established.
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Income Distribution and Macroeconomics
Oded Galor,Joseph Zeira +1 more
TL;DR: The authors analyzes the role of wealth distribution in macroeconomics through investment in human capital and shows that the initial distribution of wealth affects aggregate output and investment both in the short and in the long run, as there are multiple steady states.
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