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Channels of transmission of inequality to growth: A survey of the theory and evidence from a Portuguese perspective

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  • Adelaide Duarte

    ()
    (Faculty of Economics/GEMF, University of Coimbra)

  • Marta Simões

    ()
    (Faculty of Economics/GEMF, University of Coimbra)

Abstract

We review the theoretical and empirical literature on the relationship between inequality and economic growth from the perspective of the Portuguese economy in order to identify the correct (predicted) sign for the relationship in this particular country and the underlying mechanisms that explain it. Different mechanisms relating inequality and economic growth can be at stake explaining why different countries can experience different outcomes in the same period of time or why the same country experiences different outcomes in different periods of time. It is thus fundamental to correctly identify the channels of transmission of inequality to growth in the Portuguese economy. Ideally, all the mechanisms selected should be tested, but prior judgments should also lead us to produce a ranking of the mechanisms according to its relevance for the economy under analysis. This correct identification and ranking leads to more accurate policy recommendations as far as redistributive policies for the Portuguese economy are concerned.

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Bibliographic Info

Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2009-07.

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Length: 51 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:gmf:wpaper:2009-07

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Keywords: Inequality; Growth; Portugal.;

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Cited by:
  1. Adelaide Duarte & Marta Simões, 2010. "Regional growth in Portugal: assessing the contribution of earnings and education inequality," GEMF Working Papers, GEMF - Faculdade de Economia, Universidade de Coimbra 2010-11, GEMF - Faculdade de Economia, Universidade de Coimbra.
  2. João Gabriel Fidalgo & Marta Simões & Adelaide Duarte, 2010. "Mind the Gap: Education Inequality at the Regional Level in Portugal, 1986-2005," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, Faculdade de Economia, Universidade de Coimbra, issue 32, pages 22-43, December.

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