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Income inequality and economic growth: New evidence from Latin America

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  • Fernando Delbianco

    ()

  • Carlos Dabús

    ()

  • María Ángeles Caraballo

    ()

Abstract

This paper explores the relationship between the inequality of income distribution and the economic growth of 20 Latin American and Caribbean countries during the 1980-2010 period. The study shows that the features of this relationship depend on the income level. In general, inequality is harmful to economic growth. However, when it comes to the upper tail of the richer countries’ income distribution, higher inequality encourages economic growth and the relation becomes positive. Thus, contrary to the economic policy recommendations for the richer countries, our evidence suggests that progressive redistributive policies in favor of poorer layers of population promote economic growth in lower income economies. ***** En este artículo se estudia la relación entre la desigualdad del ingreso y el crecimiento para veinte economías de América Latina y el Caribe, para el período 1980-2010. Los resultados muestran que la relación entre desigualdad e ingreso depende fuertemente del nivel de ingreso que un país presente. En general, la desigualdad afecta de manera negativa al crecimiento. En cambio, para los países más ricos, mayor desigualdad determina mayor crecimiento. Por ende, las recomendaciones de política que surgen de los resultados de este artículo serían aquellas con objetivo de reforzar las políticas redistributivas progresivas en los países de menor ingreso

Suggested Citation

  • Fernando Delbianco & Carlos Dabús & María Ángeles Caraballo, 2014. "Income inequality and economic growth: New evidence from Latin America," Revista Cuadernos de Economía, Universidad Nacional de Colombia -FCE - CID, August.
  • Handle: RePEc:col:000093:012109
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    References listed on IDEAS

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    Cited by:

    1. Moheddine Younsi & Marwa Bechtini, 2020. "Economic Growth, Financial Development, and Income Inequality in BRICS Countries: Does Kuznets’ Inverted U-Shaped Curve Exist?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 721-742, June.
    2. D.G. Rodionov & T.J. Kudryavtseva & A.E. Skhvediani, 2018. "Human Development and Income Inequality as Factors of Regional Economic Growth," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 323-337.
    3. Mª Ángeles Caraballo & Eva Mª Buitrago, 2019. "Ethnolinguistic Diversity and Education. A Successful Pairing," Sustainability, MDPI, Open Access Journal, vol. 11(23), pages 1-18, November.
    4. Fernando Delbianco & Carlos Dabús & María angeles Caraballo pou, 2016. "Growth, Inequality and Corruption: Evidence from Developing Countries," Economics Bulletin, AccessEcon, vol. 36(3), pages 1811-1820.
    5. Yuriy Bilan & Halyna Mishchuk & Natalia Samoliuk & Halyna Yurchyk, 2020. "Impact of Income Distribution on Social and Economic Well-Being of the State," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-15, January.
    6. Haroon Ur Rashid Khan & Anwar Khan & Khalid Zaman & Agha Amad Nabi & Sanil S. Hishan & Talat Islam, 2017. "Gender discrimination in education, health, and labour market: a voice for equality," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(5), pages 2245-2266, September.
    7. Carolina Jimenez & Luis Moncada & Diego Ochoa-Jimenez & Wilman-Santiago Ochoa-Moreno, 2019. "Kuznets Environmental Curve for Ecuador: An Analysis of the Impact of Economic Growth on the Environment," Sustainability, MDPI, Open Access Journal, vol. 11(21), pages 1-11, October.
    8. NWOSA Philip Ifeakachukwu, 2020. "Globalisation, Economic Growth and Income Inequality in Nigeria," Indian Journal of Human Development, , vol. 14(2), pages 202-212, August.

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