A Survey on Growth and Inequality: Does Improved Inequality Data Have Anything to Say?
AbstractTheories 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.
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Bibliographic InfoPaper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 200501.
Length: 19 pages
Date of creation: Oct 2005
Date of revision: Oct 2005
Find related papers by JEL classification:
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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.:
- Oded Galor & Joseph Zeira, 2013.
"Income Distribution and Macroeconomics,"
2013-12, Brown University, Department of Economics.
- Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
- Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
- Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
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