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Inequality And Growth: From Micro Theory To Macro Empirics

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  • Niko Gobbin
  • Glenn Rayp
  • Dirk Van de gaer

Abstract

We show that the way individual income data should be aggregated into an index of inequality in order to explain countries' growth performance is theory specific. A simulation set‐up shows that the use of a wrong measure might obscure the inequality–growth relationship and that the relative performance of different measures of inequality can be informative about the channel through which inequality influences economic growth.

Suggested Citation

  • Niko Gobbin & Glenn Rayp & Dirk Van de gaer, 2007. "Inequality And Growth: From Micro Theory To Macro Empirics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(4), pages 508-530, September.
    • Handle: RePEc:bla:scotjp:v:54:y:2007:i:4:p:508-530
    DOI: 10.1111/j.1467-9485.2007.00427.x
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    References listed on IDEAS

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    1. Assar Lindbeck, 1993. "The Welfare State," Books, Edward Elgar Publishing, number 1003.
    2. Atkinson, A.B. & Brandolini, A., 2000. "Promise and Pitfalls in the Use of 'Secondary' Data -Sets: Income Inequality in OECD Countries," Papers 379, Banca Italia - Servizio di Studi.
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    4. repec:aia:aiaswp:wp14 is not listed on IDEAS
    5. Niko Gobbin & Glenn Rayp, 2004. "Inequality and Growth: Does Time Change Anything," Development and Comp Systems 0402005, University Library of Munich, Germany.
    6. Assar Lindbeck, 1993. "The Selected Essays of Assar Lindbeck," Books, Edward Elgar Publishing, volume 0, number 287.
    7. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    8. Viaene, J.-M. & Zilcha, I., 2001. "Human Capital Formation, Income Inequality and Growth," Papers 2001-13, Tel Aviv.
    9. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
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    Cited by:

    1. John Nkwoma Inekwe & Yi Jin & Maria Rebecca Valenzuela, 2020. "Income inequality, financial flows and political institution: sub-Saharan African financial network," Empirical Economics, Springer, vol. 58(6), pages 2635-2665, June.
    2. Jürgen Faik, 2012. "Impacts of an Ageing Society on Macroeconomics and Income Inequality: The Case of Germany since the 1980s," SOEPpapers on Multidisciplinary Panel Data Research 518, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Michal Brzezinski, 2013. "Income Polarization and Economic Growth," LIS Working papers 587, LIS Cross-National Data Center in Luxembourg.
    4. Bruce E. Kaufman, 2010. "Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate," ILR Review, Cornell University, ILR School, vol. 63(3), pages 427-453, April.
    5. Michel Dumont & Nikolina Stojanovska & Ludo Cuyvers, 2011. "World inequality, globalisation, technology and labour market institutions," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(3), pages 257-272, June.
    6. F Marchionne & S Parekh, 2015. "Growth, Debt, and Inequality," Economic Issues Journal Articles, Economic Issues, vol. 20(2), pages 67-94, September.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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