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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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The Evolution of an Economic and Political Middle Class in Transition Countries
Daniel Berkowitz,John E. Jackson +1 more
TL;DR: In this article, the authors examined measures of income shares and growth, political attitudes and voting in Poland and Russia during the 1990's to test the proposition that the growth of an entrepreneurial based sector of new enterprises is an important factor in the development of an economic and a political middle class.
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How May International Trade affect Poverty in a Developing Country Setup? The Inequality Channel
TL;DR: In this paper, the authors provide a comprehensive review of recent literature on the topic in order to reach some neutral grounds and find out that though trade might carry positive affects for the poor in developing countries through growth, such gains are not equally distributed among the rich and the poor.
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Fiscal Adjustment and Income Inequality: Sub-National Evidence from Brazil
TL;DR: The authors found that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures in Brazil over the period 1995-2011, which contrasts with the conclusions of several papers on the effects of fiscal consolidation on inequality using national data for OECD economies.
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Social Exclusion and Economic growth in the Mexican Regions: A Spatial Approach
TL;DR: In this paper, the authors analyze the importance of social exclusion and its relationship to economic growth in the main Mexican regions using the information provided by the Mexican Institute for Statistics and Geography (INEGI).
References
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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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