Theories on the relationship between inequality and economic growth can be divided into two strands of paradigm, i.e. those which predict tradeoff between growth and equity, and those which predict no tradeoff. The consensus of empirical literature in 1980s until mid 1990s suggest there need be no conflict between fast growth and distribution. Empirical works in that era, however, were subject to criticism over the reliability of inequality data. The availability and accessibility of more improved income inequality data after the publication of Deininger and Squire’s (1996) had motivated more empirical works on the relationship between growth and inequality and had also made possible the use of relatively advanced econometric methods. Recent empirical literature following this publication of new dataset, however, do not provide strong support for whether growth and inequality are negatively or positively associated. It mainly suggest no overall relation between growth and inequality. There is little indication, however, that in the context of developing countries, the tradeoff may be resolved.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: