Inequality And Growth: From Micro Theory To Macro Empirics
AbstractTo establish the nature of the link between income distribution and economic growth by means of a standard growth regression, one needs to collapse an entire income distribution into a scalar measure of inequality. Due to data shortages macro-economic research has typically been forced to use the gini coefficient for this purpose. Using a simulation set up we check how well different measures of inequality or poverty succeed in detecting the correct relationship. We find that the gini coefficient might not be the worst of choices, but the comparison of the explanatory power of different inequality measures can help to identify the theoretical mechanism through which inequality affects growth.
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Bibliographic InfoArticle provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.
Volume (Year): 54 (2007)
Issue (Month): 4 (09)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0036-9292
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Other versions of this item:
- N. Gobbin & G. Rayp & D. Van De Gaer, 2004. "Inequality and Growth: From Micro Theory to Macro Empirics," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/258, Ghent University, Faculty of Economics and Business Administration.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- N. Gobbin & G. Rayp, 2004.
"Inequality and Growth: Does Time Change Anything?,"
Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium
04/230, Ghent University, Faculty of Economics and Business Administration.
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- Michal Brzezinski, 2013.
"Income polarization and economic growth,"
National Bank of Poland Working Papers
147, National Bank of Poland, Economic Institute.
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"Impacts of an Ageing Society on Macroeconomics and Income Inequality – The Case of Germany since the 1980s,"
272, ECINEQ, Society for the Study of Economic Inequality.
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