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Revisiting the Relationship between Income Inequality and Economic Growth

  • Ricardo Argüello Cuervo

    ()

    (Universidad del Rosario)

Most models that explore the relationship between income inequality and economic growth postulate the existence of a negative correlation between the two operating through diverse channels. parallel to the theoretical models, a number of empirical studies have attempted to appraise this relationship . A broad consensus had built validating the existence of such negative correlation until some panel data studies tended to show the opposite result. The review of ensuing debate as well as the empirical estimation undertook in this paper show that estimates may not be as robust believed. It is suggested that country case studies may be to explore this issue more appropriately.

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Article provided by Universidad de Antioquia, Departamento de Economía in its journal LECTURAS DE ECONOMÍA.

Volume (Year): (2006)
Issue (Month): 64 (Enero-Junio)
Pages: 37-58

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Handle: RePEc:lde:journl:y:2006:i:64:p:37-58
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  1. Saint-Paul, G. & Verdier, T., 1991. "Education, Democracy and growth," DELTA Working Papers 91-27, DELTA (Ecole normale supérieure).
  2. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  3. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
  4. 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.
  5. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University.
  6. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
  7. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  8. Li, Hongyi & Zou, Heng-fu, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 318-34, October.
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