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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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Effects of income inequality on China’s economic growth
TL;DR: In this paper, a pilot empirical study is carried out on how income inequality affects growth through incorporating panel data information into a quarterly macro-econometric model of China, which is then used to augment household consumption equations in the model.
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Inequality, Crime and Economic Growth. A Classical Argument for Distributional Equality
TL;DR: In this paper, the authors study the dynamic general-equilibrium interactions between inequality, crime and economic growth by embedding the rational choice-theoretical approach to criminal behavior in a heterogeneous-agents endogenous-growth OLG model.
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Agricultural Productivity Growth and the Role of Capital in South Asia (1980–2013)
TL;DR: In this article, the authors assessed agricultural sustainability in South Asia (i.e., Bangladesh, Pakistan, India and Nepal) by computing multi-lateral multi-temporal Total Factor Productivity (TFP) indices and their six finer components (technical change, technical-, scale- and mix-efficiency changes, residual scale and residual mix efficiency changes) and examined the role of capital in driving TFP growth covering a 34-year period (1980-2013).
Journal ArticleDOI
Top incomes and national savings
Andrew Leigh,Alberto Posso +1 more
TL;DR: The relationship between income inequality and national savings is theoretically ambiguous, and past empirical studies have delivered mixed results as discussed by the authors, and the authors of this paper revisit the question using a newly available source of data on inequality: the income share of the richest 10 percent and the richest 1 percent.
Book
Equity and Growth in a Globalizing World
Ravi Kanbur,Michael Spence +1 more
TL;DR: The work of the Commission on Growth and Development as discussed by the authors was one of the first to recognize that experts do not always agree, even on issues that are central to growth, and did not want to disguise or gloss over these uncertainties and differences.
References
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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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