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Inequality and Economic Growth: The Perspective of the New Growth Theories

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TLDR
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.

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National Debt, Borrowing Constraints, and Human Capital Accumulation in an Endogenous Growth Model

TL;DR: In this article, an overlapping-generations endogenous growth model of human capital accumulation with borrowing constrained young individuals is presented, where an increase in public debt is used to redistribute tax burdens from every individual's youth to his middle age.
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The effects of inequality on growth: a survey of the theoretical and empirical literature

TL;DR: In this paper, a survey of the empirical studies regarding the relationship between inequality and growth is presented, showing that only the endogenous fertility approach and the explanation based on political instability receive convincing support from the data.
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Wage-led growth: theory, evidence, policy

TL;DR: In this article, the authors present a two-country short run model to clarify the key concepts surrounding a wage-led vs a profit-led demand regime and analyze demand regimes with respect to national as well as international changes in the wage share.
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Catalyst for Change; Empowering Women and Tackling Income Inequality

TL;DR: In this article, the authors analyzed gender inequality by using and extending the United Nation's Gender Inequality Index (GII) to cover two decades for almost 140 countries and found that an increase in the GII from perfect gender equality to perfect inequality is associated with an almost 10 points higher net Gini coefficient.
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The Optimal Timing of School Tracking

TL;DR: The authors developed a simple model which determines the optimal timing of school tracking as the outcome of the trade off between the advantages of specialization, which call for early tracking, and the costs of early selection, which lead to later tracking.
References
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Initial conditions and moment restrictions in dynamic panel data models

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

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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