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Inequality, Growth, and Overtaking

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Author Info
Yoshiaki Sugimoto (Graduate School of Economics, Kobe University)
Abstract

This research develops a theory about the role of within-country income inequality leading to overtaking in economic performance among 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 follows a higher growth path in the short run, with 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://129.3.20.41/eps/dev/papers/0508/0508012.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0508012.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 35 pages
Date of creation: 29 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0508012

Note: Type of Document - pdf; pages: 35
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Web page: http://129.3.20.41

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Related research
Keywords: Income Distribution; Economic Growth; Overtaking; Divergence; Convergence.;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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