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Effects of Income Distribution on Growth

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    Abstract

    Several theories hold that income distribution affects economic growth. Some of them use cross-section country regression analysis to demonstrate their beliefs. This procedure has such a bulk of problems that its results should be analyzed carefully. Theories supported by this kind of empirical verification are most affected. Results suggest that a relationship between income distribution and economic growth exists but it seems to be nonlinear, complex and dynamic. Alternative statistical methods can be used in combination with historical studies and case studies, where institutions are included, for a better understanding of prevalent linkages.

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    File URL: http://www.economicpolicyresearch.org/scepa/publications/workingpapers/2002/dev_beltran.pdf
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    Bibliographic Info

    Paper provided by Schwartz Center for Economic Policy Analysis (SCEPA), The New School in its series SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. with number 2002-16.

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    Length: 34 pages
    Date of creation: 04 Nov 2002
    Date of revision:
    Handle: RePEc:epa:cepawp:2002-16

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    Keywords: income distribution; economic growth; economic development; country studies; cross-sectional models;

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    1. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
    2. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    3. Weede, Erich, 1997. "Income inequality, democracy and growth reconsidered," European Journal of Political Economy, Elsevier, vol. 13(4), pages 751-764, December.
    4. Edwards, Sebastian, 1997. "Trade Policy, Growth, and Income Distribution," American Economic Review, American Economic Association, vol. 87(2), pages 205-10, May.
    5. Levine, Ross & Zervos, Sara J, 1993. "What We Have Learned about Policy and Growth from Cross-Country Regressions?," American Economic Review, American Economic Association, vol. 83(2), pages 426-30, May.
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