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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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Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer- Employee Data
TL;DR: In this paper, a new employer-employee-linked data set for Germany was used to examine the labor market effects of flexible workplace systems and found that HPWOs increase both across and within firm inequality.
Posted Content
Social capital and the reproduction of economic inequality in polarized societies
Tewodaj Mogues,Michael R. Carter +1 more
TL;DR: The authors explored the idea of how wealth is distributed across social groups (ethnic or language groups, gender, etc.) and how such distribution fundamentally affects the evolution of economic inequality by providing microfoundations suitable for this exploration.
BookDOI
Too poor to grow
Humberto Lopez,Luis Servén +1 more
TL;DR: In this article, the authors provide a direct empirical assessment of the impact of poverty on growth and find that poverty has a negative impact on growth that is significant both statistically and economically.
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Inequality is Bad for Growth of the Poor (but Not for That of the Rich)
TL;DR: In this paper, the authors assess the impact of overall inequality, as well as inequality among the poor and among the rich, on the growth rates along various percentiles of the income distribution.
Journal Article
Income Distribution Policies For Faster Poverty Reduction
TL;DR: In this article, the authors find evidence of a concave relationship between inequality and growth: growth can be low (or negative) at low levels of inequality (due to disincentive effects) and high levels of inequalities tend to reduce economic growth, and therefore poverty reduction through growth.
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.
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.
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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