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Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data

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  • Stephen Knowles
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    Abstract

    Almost all the recent empirical work on the relationship between income inequality and economic growth has used inequality data that are not consistently measured. This article argues that this is inappropriate and shows that the significant negative correlation often found between income inequality and growth across countries may not be robust when income inequality is measured in a consistent manner. However, evidence is found of a significant negative correlation between consistently measured inequality of expenditure data and economic growth for a sample of developing countries.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/0022038042000276590
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

    Volume (Year): 41 (2005)
    Issue (Month): 1 ()
    Pages: 135-159

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    Handle: RePEc:taf:jdevst:v:41:y:2005:i:1:p:135-159

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    1. Stephan Klasen, 2002. "Low Schooling for Girls, Slower Growth for All? Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development," World Bank Economic Review, World Bank Group, World Bank Group, vol. 16(3), pages 345-373, December.
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    7. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
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    10. Rodrik, Dani, 1999. " Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, Springer, vol. 4(4), pages 385-412, December.
    11. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(487), pages 326-344, 04.
    12. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 512, China Economics and Management Academy, Central University of Finance and Economics.
    13. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, Elsevier, vol. 57(2), pages 259-287.
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