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Revisiting the Relationship between Income Inequality and Economic Growth

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  • Ricardo Argüello Cuervo

    ()
    (Universidad del Rosario)

Abstract

Most models that explore the relationship between income inequality and economic growth postulate the existence of a negative correlation between the two operating through diverse channels. parallel to the theoretical models, a number of empirical studies have attempted to appraise this relationship . A broad consensus had built validating the existence of such negative correlation until some panel data studies tended to show the opposite result. The review of ensuing debate as well as the empirical estimation undertook in this paper show that estimates may not be as robust believed. It is suggested that country case studies may be to explore this issue more appropriately.

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Bibliographic Info

Article provided by Universidad de Antioquia, Departamento de Economía in its journal LECTURAS DE ECONOMÍA.

Volume (Year): (2006)
Issue (Month): 64 (Enero-Junio)
Pages: 37-58

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Handle: RePEc:lde:journl:y:2006:i:64:p:37-58

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Web page: http://economia.udea.edu.co
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Postal: Lecturas de Economía, Departamento de Economía, Calle 67, 53-108, Medellin 050010, Colombia.

Related research

Keywords: income distribution; Growth; Panel Data Econometrics; Multi regional;

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References

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  1. Li, Hongyi & Zou, Heng-fu, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 318-34, October.
  2. Saint-Paul, G. & Verdier, T., 1991. "Education, Democracy and growth," DELTA Working Papers 91-27, DELTA (Ecole normale supérieure).
  3. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  4. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  5. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
  6. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  7. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
  8. repec:fth:coluec:636 is not listed on IDEAS
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