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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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Inequality, trust and growth : An experimental study
TL;DR: In this article, a three player dynamic public goods experiment is presented, where players choose to sabotage, to co-operate, or to play best response, and the property rights to social output are distributed unequally.
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Household appliance ownership and income inequality: Evidence from micro data in China
TL;DR: Wang et al. as discussed by the authors investigated the relationship between income inequality and appliance ownership using panel data from the China Health and Nutrition Survey (CHNS) and found that income inequality has negative impacts on appliance penetration rate across specifications, except for the initial development stage.
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Understanding inequality in Brazil: a conceptual overview
TL;DR: A background note to a joint IPEA/World Bank report, provisionally entitled "Selected Topics on Income Inequality in Brazil", with publication planned for 2001, can be found in this article.
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Human Capital Accumulation, Education and Earnings Inequality
TL;DR: In this article, a micro-foundation of human capital formation is proposed, emphasizing heterogeneity of individuals and multidimensionality of human resources, and the reactions in individual behavior triggered by technological change are crucially affected by the education system and are shown to be responsible for divergent developments in inequality.
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Endogenous (re-)distributive policies and economic growth: a comparative static analysis
TL;DR: The authors analyzes the interplay of growth, re-distribution and policies when the latter are set exogenously or when the former depend on economically important fundamentals, and shows that the long-run cross-country relationship between growth and endogenous policy is generally not clearcut.
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.
Journal ArticleDOI
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.
Journal ArticleDOI
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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