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Effects of Income Distribution on Growth

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Abstract

Several theories hold that income distribution affects economic growth. Some of them use cross-section country regression analysis to demonstrate their beliefs. This procedure has such a bulk of problems that its results should be analyzed carefully. Theories supported by this kind of empirical verification are most affected. Results suggest that a relationship between income distribution and economic growth exists but it seems to be nonlinear, complex and dynamic. Alternative statistical methods can be used in combination with historical studies and case studies, where institutions are included, for a better understanding of prevalent linkages.

Suggested Citation

  • Edgar Pardo-Beltrán, 2002. "Effects of Income Distribution on Growth," SCEPA working paper series. 2002-16, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    • Handle: RePEc:epa:cepawp:2002-16
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    More about this item

    Keywords

    income distribution; economic growth; economic development; country studies; cross-sectional models;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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