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Inequality and Institutions

Author

Listed:
  • Alberto Chong

    (Research Department, Inter-American Development Bank)

  • Mark Gradstein

    (Department of Economics, Ben Gurion University, CEPR, CESifo, IZA)

Abstract

This paper presents theory and evidence on the relationship between inequality and institutional quality. We exhibit a model in which the two may dynamically reinforce each other and set to test this relationship with a broad array of institutional measures. The double causality between institutional strength and a more equal distribution of income is empirically established using dynamic panel and linear feedback analysis. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Alberto Chong & Mark Gradstein, 2007. "Inequality and Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 454-465, August.
  • Handle: RePEc:tpr:restat:v:89:y:2007:i:3:p:454-465
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    More about this item

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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