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Growth, Inequality and Poverty Relationships

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Heshmati, Almas () (Seoul National University, MTT Economic Research and IZA Bonn)

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Abstract

This paper examines the causal relationship between inequality and a number of macroeconomic variables frequently found in the inequality and growth literature. These include growth, openness, wages, and liberalisation. We review the existing cross-country empirical evidence on the effects of inequality on growth and the extent to which the poorest in society benefit from economic growth. The linkage between growth, redistribution and poverty is also analysed. In the review of literature mainly empirical examples from 1990s are taken. In addition we test the conditional and unconditional relationship between inequality and growth in the post World War II period using WIDER inequality database. Regression results suggest that income inequality is declining over time. Inequality is also declining in growth of income. There is a significant regional heterogeneity in the levels and development over time. The Kuznets hypothesis represents a global U-shape relationship between inequality and growth.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1338.

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Length: 31 pages
Date of creation: Oct 2004
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Handle: RePEc:iza:izadps:dp1338

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Related research
Keywords: growth openness income inequality wage inequality poverty indices

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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  1. TAUSCH, Arno, 2008. "On the world market trajectory of 21 major book publishing companies in globalization and European studies in 100+ countries. From “Amsterdam University Press” via “Palgrave” and “Nova Scien," MPRA Paper 9613, University Library of Munich, Germany. [Downloadable!]
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