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Inequality, Growth, and Overtaking

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  • Yoshiaki Sugimoto

    (Brown University)

Abstract

This research develops a theory about the role of inequality in the overtaking of growth performance across countries. The theory captures two opposing effects of inequality on factor accumulation and suggests that the qualitative change in their combined effect is a prime cause of overtaking. Due to the initial dominance of the positive effect of inequality, a less egalitarian economy undergoes a higher growth path in the short run, followed by a lower growth path in the long run. It is also shown that divergence or convergence may arise instead of overtaking, depending on the initial levels of development and inequality.

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File URL: http://128.118.178.162/eps/data/papers/0304/0304001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Data with number 0304001.

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Date of creation: 15 Apr 2003
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Handle: RePEc:wpa:wuwpda:0304001

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Web page: http://128.118.178.162

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Keywords: Wealth Distribution; Overtaking; Divergence; Convergence;

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Cited by:
  1. O'Neill, Donal & Van Kerm, Philippe, 2004. "A new approach for analysing income convergence across countries," IRISS Working Paper Series 2004-03, IRISS at CEPS/INSTEAD.

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