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Inequality, poverty and economic growth

Author

Listed:
  • Robert Breunig
  • Omer Majeed

Abstract

Recent research has highlighted a negative impact of inequality on economic growth. We re-evaluate this hypothesis focusing on both inequality and poverty and their interaction. We replicate previous results showing that inequality has a negative impact on growth. However, we show that when we account for both inequality and poverty, the negative effect of inequality on growth appears to be concentrated amongst countries with high poverty. This would argue for policies targeted towards alleviating poverty even if they have no effect on inequality.

Suggested Citation

  • Robert Breunig & Omer Majeed, 2020. "Inequality, poverty and economic growth," International Economics, CEPII research center, issue 161, pages 83-99.
    • Handle: RePEc:cii:cepiie:2020-q1-161-7
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    File URL: https://www.sciencedirect.com/science/article/pii/S2110701719301052
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    Citations

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    Cited by:

    1. Mdingi, Kholeka & Ho, Sin-Yu, 2023. "Income inequality and economic growth: An empirical investigation in South Africa," MPRA Paper 117733, University Library of Munich, Germany.
    2. Olumide Olusegun Olaoye, 2022. "Sub‐Saharan Africa's debt‐financed growth: How sustainable and inclusive?," African Development Review, African Development Bank, vol. 34(4), pages 443-458, December.
    3. Sèna Kimm Gnangnon, 2023. "Do unilateral trade preferences help reduce poverty in beneficiary countries?," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 249-288, February.
    4. Duong, Khanh & Nguyen Phuc Van, 2023. "Rethinking the Inequality-Growth Nexus: Short-Term Gains and Long-Term Challenges," GLO Discussion Paper Series 1356, Global Labor Organization (GLO).
    5. BANDA, Iges & WILLIAMS-ADEYANJU, Zainab & SKRAME, Dea, 2022. "Poverty, Education And Economic Growth: A Case Study Of Western Balkan Countries," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 10(1), pages 30-43, October.

    More about this item

    Keywords

    Inequality; Economic growth; Poverty; Cross-country regressions;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other

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