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Inequality and economic growth: the perspective of the new growth theories

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  • Aghion, Philippe
  • Caroli, Eve
  • Garcia-Penalosa, Cecilia

Abstract

In this article, we review the literature focusing on the relationships between inequality and economic growth. We show that wealth inequality may be bad for growth, in particular when capital markets are imperfect and agents are heterogenous, or when some agents suffer from institutional limitations in the access to investment.

Suggested Citation

  • Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
    • Handle: RePEc:cpm:cepmap:9908
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    References listed on IDEAS

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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