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Income Distribution, Poverty Trap and Economic Growth

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  • Oyama, Masako
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    Abstract

    The post-war growth experiences of developing countries lead to the idea that income equality may accelerate economic growth. In this paper, a theoretical model showed the possibility that equality makes a country human-capital abundant, which enables industrialization and higher economic growth. On the other hand, in unequal developing countries where majority of people manage to survive at minimum consumption level, human capital investment such as schooling cannot be done. Such countries become unskilled labor abundant and suffer further from low economic growth. In addition, the two-good framework showed the possibility that protecting infant industry with dynamic externality enhances economic growth.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/14431/1/pie_dp106.pdf
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    Bibliographic Info

    Paper provided by Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University in its series Discussion Paper with number 106.

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    Length: 31 p.
    Date of creation: Aug 2002
    Date of revision:
    Handle: RePEc:hit:piedp1:106

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    Related research

    Keywords: income distribution; economic growth; human capital; comparative advantage; learning-by-doing;

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    1. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
    2. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
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