The Welfare Implications of Growth Regressions

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The Welfare Implications of Growth Regressions

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Donal O.Neill () (Economics, Finance and Accounting Dept., NUI Maynooth, Co. Kildare, Ireland)

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Donal O'Neill

Abstract

Regressions relating the growth rate in income to initial income have been the source of much recent debate in growth economics. Recent research has emphasised the importance of allowing for non- linearities in these models when explaining the evolution of income over time. In this paper we argue these extended growth regressions are also useful in facilitating welfare comparisons across income dis- tributions, in a way that is not possible using alternative measures of convergence. To do this we exploit the similaritites between the in- come convergence literature and work on tax progressivity in the pub- lic .nance literature. We illustrate our approach using both regional data across the United States, Japan and Europe and countrywide comparisons.

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Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n1570505.

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Length: 23 pages
Date of creation: May 2005
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Handle: RePEc:may:mayecw:n1570505

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Postal: Maynooth, Co. Kildare
Phone: 353-1-7083728
Fax: 353-1-7083934
Web page: http://www.may.ie/academic/economics/
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Find related papers by JEL classification:
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

This paper has been announced in the following NEP Reports:

NEP-ALL-2005-09-29 (All new papers)
NEP-DEV-2005-09-29 (Development)

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repec:att:wimass:1919983 is not listed on IDEAS
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