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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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The Provision of Incentives in Firms
TL;DR: In this article, a review of existing work on the provision of incentives for workers is presented, and the authors evaluate this literature in the light of a growing empirical literature on compensation from two perspectives: first, an underlying assumption of this literature is that individuals respond to contracts that reward performance.
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Inequality and Growth in a Panel of Countries
TL;DR: In this paper, a broad panel of countries showed little overall relation between income inequality and rates of growth and investment, while the Kuznets curve is a clear empirical regularity, but it does not explain the bulk of variations in inequality across countries or over time.
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The New Growth Evidence
TL;DR: The authors surveys the recent empirical literature on economic growth, starting with a discussion of stylized facts, data problems, and statistical methods and concludes that efficiency has grown at different rates across countries, casting doubt on neoclassical models in which technology is a public good.
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A Reassessment of the Relationship between Inequality and Growth
TL;DR: In this paper, the authors used an improved data set on income inequality which not only reduces measurement error, but also allows estimation via a panel technique, and found that in the short and medium term, an increase in a country's level of income inequality has a significant positive relationship with subsequent economic growth.
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Natural resources, education, and economic development
TL;DR: The authors found that economic growth has varied inversely with the share of natural capital in national wealth across countries, and that natural capital appears to crowd out human capital, thereby slowing down the pace of economic development.
References
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Report SeriesDOI
Technology and Changes in Skill Structure: Evidence from Seven OECD Countries
Stephen Machin,John Van Reenen +1 more
TL;DR: In this paper, the authors investigate whether a directly observed measure of technical change (R&D intensity) is closely linked to the growth in the importance of more highly skilled workers which has occurred in all countries.
Posted Content
The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox
TL;DR: The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox Author(s): Paul A. David Source: The American Economic Review, Vol. 80, No. 2, Papers and Proceedings of the Hundred and Second Annual Meeting of the American Economic Association (May, 1990), pp. 355-361 as mentioned in this paper
Posted Content
Inequality and Growth
TL;DR: In this article, the authors present and extend the main theories linking income distribution and growth, as well as the relevant empirical evidence, using two unifying models and an empirical exercise.
Journal ArticleDOI
Public versus Private Investment in Human Capital: Endogenous Growth and Income Inequality
Gerhard Glomm,B. Ravikumar +1 more
TL;DR: In this paper, the authors present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth and use simple functional forms for preferences, technologies, and income distribution to highlight the distinction between economies with public education and those with private education.
Journal ArticleDOI
Workers, Wages, and Technology
TL;DR: In this paper, the authors examined how plant-level wages, occupational mix, workforce education and productivity vary with the adoption and use of new factory automation technologies such as programmable controllers, computer-automated design, and numerically controlled machines.
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