Effects of Income Inequality on Growth through Efficiency Improvement and Capital Accumulation
AbstractIn the present paper, the inverted-U shape relationship between economic growth and inequality found in Chen (2003) is re-examined. We decompose productivity growth into efficiency improvement, capital accumulation and technological progress and then ascertain their determinants by employing fixed effects and dynamic panel models. In particular, this paper focuses on the question of how economic inequality affects capital accumulation and efficiency improvement. Key findings are that inequality enhances efficiency improvement as well as capital accumulation and then undermines them as inequality widens. However, other factors such as human capital, openness and government consumption have different effects on them.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Economic Journal.
Volume (Year): 23 (2009)
Issue (Month): 2 ()
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Other versions of this item:
- Yamamura, Eiji & Shin, Inyong, 2008. "Effects of Income Inequality on Growth through Efficiency Improvement and Capital Accumulation," MPRA Paper 10220, University Library of Munich, Germany.
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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