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Relations Between Unequal Income Distribution, Economic Growth and Income Poverty - Latest Findings in Current Economics

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  • Erika L´apinová

Abstract

In this paper we systematize existing theoretical and empirical, often contradictory, knowledge of leading international economists and foreign institutions about reciprocal and causal relations between income distribution, economic growth and income poverty, in order to highlight the importance of income distribution in the economic system, the causes and consequences of income distribution at the macroeconomic and microeconomic levels, which knowledge is relevant for both current economic theory and economic policy. In this paper we seek to answer questions such as: Why is it important to be interested in income inequality? How to relate income inequality and economic growth? Does economic growth affect income inequality or can income inequality increase or decrease the rate of growth? Is the initial level of property or income important for macroeconomic performance and macroeconomic growth? How can the initial level of wealth and income inequality influence the effects of economic growth on poverty reduction? Is there an effective state policy to reduce or eliminate income poverty? Can a government reduce poverty only by promoting economic growth, or is it desirable to choose a combination of growthredistribution policies?

Suggested Citation

  • Erika L´apinová, 2011. "Relations Between Unequal Income Distribution, Economic Growth and Income Poverty - Latest Findings in Current Economics," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2011(4), pages 3-24.
  • Handle: RePEc:prg:jnlaop:v:2011:y:2011:i:4:id:337:p:3-24
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    Keywords

    income distribution; economic growth; income inequality; income poverty;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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