POLICY QUESTION " What is the relationship between inequality and economic growth? Specifically, does income inequality hamper or foster economic growth in developing countries? " BACKGROUND As the global economy experienced rapid economic growth after World War II, an intense debate arose as to whether such growth benefited poor people and reduced income inequality or vice versa. In the 1950s,...

The analysis that follows tests the regression model of Income Inequality by examining the relation among Gini coefficient, GDP growth rate, saving rate and so on within the same country. The purpose of this study is to test out the relation between income inequality and economic growth rate, and the result suggests that income inequality has a negative impact on economic growth rate in the cas...

All of the recent empirical work on the relationship between income inequality and economic growth has used inequality data that are not consistently measured. This paper argues that this is inappropriate and shows that the significant negative correlation often found between income inequality and growth across countries is not robust when income inequality is measured in a consistent manner. H...

Many empirical studies have shown that economic growth generally leads to a drop in poverty. These studies have also pointed out that a given growth rate is compatible with a large range of outcomes in terms of poverty reduction. This means that growth is more pro-poor in certain cases than in others. Using complete and partial poverty orderings, this paper suggests a measure which captures the...

Growth, Development, and Technological Change The theory of endogenous technical change has deeply contributed to our understanding of the fundamental sources of economic growth and development. In this chapter we survey important contributions in the field by focussing on the basic structure of endogenous growth models with horizontal as well as vertical innovation and emphasizing important im...

equitable distribution of income and economic growth are challenges for policy-makers. therefore, it is important to investigate the influencing factors of it. given that financial development is an important factor affecting on income inequality, in this study, the effect of financial development on the gini coefficient as income inequality index is examined with using panel data methods durin...

a r t i c l e i n f o The paper contributes to the literature relating to inequality and economic growth, in particular, we investigate the effects of wealth distribution on the kind of growth driven by innovation, i.e. Schumpeterian growth. Since two types of individuals are assumed, the poor and the rich, Gini-coefficient is treated in two variables, namely the relative wealth of the poor and...

This paper investigates causal relations between economic growth, income inequality, and transmission channels during the period 1972 to 2016. These channels include saving rate, investment rate, redistribution policies, human capital, and conspicuous consumption. There is no strong evidence that supports uni-directional or bi-directional causality. In addition, some of the transmission channel...

The field of “Happiness Research” has grown markedly. A central question is whether higher income and/or economic growth rates are associated with higher levels of Subjective Well Being (SWB). Cross-sectional analysis clearly indicates that there is a positive relationship between income and SWB. However, in time series this relationship may vanish (the Easterlin Paradox). In this paper, we exa...