The Institutional Foundations of Inequality and Growth
AbstractAfter a decade of research, the effect of inequality on long-run economic growth remains unresolved, in part because researchers have treated omitted variable bias as an estimation problem rather than a deeper question of causality. In this article we argue that the key omitted variable is the quality of economic institutions. Using both cross-country and panel data specifications, we find no direct effect of inequality on growth in the long-run. Rather, the protection of property rights simultaneously raises growth rates and reduces income inequality. We interpret these findings as evidence that insecure property rights disproportionately disadvantage the poor.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Development Studies.
Volume (Year): 47 (2011)
Issue (Month): 7 ()
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- Francesco Caracciolo & Fabio Gaetano Santeramo, 2013.
"Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?,"
African Development Review,
African Development Bank, vol. 25(1), pages 42-54, 03.
- Francesco Caracciolo & Fabio Gaetano Santeramo, 2013. "Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?," African Development Review, African Development Bank, vol. 25(1), pages 42-54.
- Caracciolo, Francesco & Santeramo, Fabio Gaetano, 2012. "Price trends and income inequalities: will Sub-Saharan-Africa reduce the gap?," MPRA Paper 45196, University Library of Munich, Germany.
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