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Income Distribution, Investment, and Growth

Author

Listed:
  • Larrain, F.B.
  • Vergara, R.M.

Abstract

This paper carries out an empirical investigation on the determinants of economic growth for a group of 45 countries, including developed and developing economies. The paper focuses on the relationship between growth and income distribution. Unlike the traditional approach in which causality runs from growth to distribution, we hypothesize that greater inequality in income distribution retards a country's growth process, because greater inequality increases the possibility of social conflict.

Suggested Citation

  • Larrain, F.B. & Vergara, R.M., 1997. "Income Distribution, Investment, and Growth," Papers 596, Harvard - Institute for International Development.
    • Handle: RePEc:fth:harvid:596
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    Citations

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    Cited by:

    1. Stephanie Seguino, 2000. "Accounting for Gender in Asian Economic Growth," Feminist Economics, Taylor & Francis Journals, vol. 6(3), pages 27-58.
    2. Chmelíková, Gabriela & Krauss, Annette & Dvouletý, Ondřej, 2019. "Performance of microfinance institutions in Europe—Does social capital matter?," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    3. Ravallion, Martin, 1998. "Does aggregation hide the harmful effects of inequality on growth?," Economics Letters, Elsevier, vol. 61(1), pages 73-77, October.
    4. Seguino, Stephanie, 2000. "Gender Inequality and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 28(7), pages 1211-1230, July.

    More about this item

    Keywords

    INCOME DISTRIBUTION ; INVESTMENTS ; ECONOMIC GROWTH;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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