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Inequality and Economic Growth: The Perspective of the New Growth Theories
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.read more
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Economic growth and the quantity and distribution of education: a survey
Petra Sauer,Martin Zagler +1 more
TL;DR: The authors discuss different attempts at incorporating the distributional dimension of human capital into the theoretical and empirical growth framework and present a series of models which deviate from the direct link between the aggregate or average level of human resources and economic growth in that they introduce the distribution of education as a new element in explaining the relationship under investigation.
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Does oil drive income inequality? New panel evidence
TL;DR: The authors used dynamic panel co-integration techniques to account for the cross-country heterogeneity, cross-section dependence, and feedback effects in the oil-volatility-inequality nexus and found that oil abundance increases human capital investment, improves institutional quality, and hence mitigates income inequality.
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What Drives Differences in Inequality Across Countries
Miguel Székely,Marianne Hilgert +1 more
TL;DR: In this article, the authors present microeconomic simulation techniques to examine what drives differences in inequality across countries, by decomposing cross-country inequality differences into the importance of individual decisions, such as fertility, mating, labor force participation, and household structure.
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Inequality in the globalizing Asia
TL;DR: In this article, the impact of globalization on the inequality of Asia was investigated and the authors found that the significant turning point of globalization at which inequality starts decreasing as further globalization proceeds.
Posted Content
The distributional effects of growth: case studies vs. Cross-country regressions
TL;DR: In this article, the authors adopt a different perspective using a few case studies and an original microeconomic methodology for decomposing time changes in the distribution of income, and show that important socio-demographic factors are at work that may contribute to hiding the true distributional consequences of growth during a particular period of time in a given country.
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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