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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
Citations
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Within Country Income Inequality in Multi-Decade Scenarios
TL;DR: Kempe-Benedict et al. as discussed by the authors argue that by combining this qualitative theory with a quantitative political theory (Selectorate theory), it is possible to explain quantitative changes in income distributions.
Posted Content
The Impact of Fiscal Decentralization on the Budget Revenue Inequality among Municipalities and Growth of Russian regions.
TL;DR: In this article, the link between the fiscal decentralization, inequality among municipalities within a region, and Russian regions' welfare is analyzed. But, despite the conventional wisdom that decentralization is beneficial, the authors suggest that the poor Russian regions do not always gain from decentralization.
Dissertation
Mathematical models for sustainable wealth redistribution
Van der Walt,Johann Christiaan +1 more
TL;DR: In this article, the implications of increasing relative inequality over time as an inherent feature of wealth growth are investigated in the presence of wealth redistribution, and it is established analytically within the context of the aforementioned mathematical models that increases in economic inequality can always be limited by means of sufficient redistribution.
Journal ArticleDOI
Redistributive taxation, wealth distribution, and economic growth
TL;DR: The authors examined the relationship between wealth distribution and economic growth in an endogenous growth model with heterogeneous households and redistributive taxation, and found that there exists a negative correlation between pre-tax inequality and the economic growth.
Journal Article
Desigualdade intragrupos educacionais e crescimento
TL;DR: A review of the main theoretical models that have been proposed in order to deal with this phenomenon can be found in this article, where three groups of explanation are identified: skill bias of recent technical change as a major factor; the stochastic processes that major technical changes set forth; and within group inequality to technological progress characterized by Schumpeterian "creative destruction" and a dual market labor.
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.
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.
Journal ArticleDOI
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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