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On the nature of income inequality across nations

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  • Ferreira, Pedro Cavalcanti
  • Issler, João Pedro
  • Pessôa, Samuel de Abreu

Abstract

In this paper, we investigate the nature of income inequality across nations. First, rather than functional forms or parameter values in calibration exercises that can potentially drives results, we estimate, test, and distinguish between types of aggregate production functions currently used in the growth literature. Next, given our panel-regression estimates, we perform several exercises, such as variance decompositions, simulations and counter-factual analyses. The picture that emerges is one where countries grew in the past for different reasons, which should be an important ingredient in policy design. Although there is not a single-factor explanation for the difference in output per-worker across nations, inequality, followed by distortions to capital accumulations and them by human capital accumulation.

Suggested Citation

  • Ferreira, Pedro Cavalcanti & Issler, João Pedro & Pessôa, Samuel de Abreu, 2000. "On the nature of income inequality across nations," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 370, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:epgewp:370
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    Cited by:

    1. Milton Barossi-Filho & Ricardo Gonçalves Silva & Eliezer Martins Diniz, 2005. "The empirics of the Solow growth model: Long-term evidence," Journal of Applied Economics, Universidad del CEMA, vol. 8, pages 31-51, May.
    2. Pessôa, Samuel de Abreu, 1999. "Um modelo de acumulação de capital físico e humano: um diálogo com a economia do trabalho," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 345, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    3. Jess Enrique Morales Pi?ro, 2004. "Labour Market Frictions, Social Policies, and Barriers to Technology Adoption," UFAE and IAE Working Papers 633.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Pedro Cavalcanti Ferreira & Osmani Teixeira de Carvalho Guillén, 2002. "Estrutura Competitiva, Produtividade Industrial e Liberação Comercial no Brasil," Working Papers Series 44, Central Bank of Brazil, Research Department.

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