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Is a country's ability to generate and distribute income determined by its productive structure?

Author

Listed:
  • Dominik Hartmann

    (IPC)

  • Cristian Jara-Figueroa

    (IPC)

  • Cesar Hidalgo

    (IPC)

Abstract

"Decades ago, Simon Kuznets proposed an inverted-u-shaped relationship describing the connection between a country's level of income and its level of income inequality. The Kuznets curve suggested that income inequality would first rise and then fall as a country's income moves from low to high levels. Yet the inverted-u-shaped relationship fails to hold when several Latin American countries are removed from the sample, and the upward side of the Kuznets curve has vanished in recent decades, as inequality in many low-income countries has increased. Moreover, several East Asian economies have grown from low to middle income while reducing their income inequality. These findings undermine the empirical robustness of the Kuznets curve, and indicate that gross domestic product (GDP) per capita is a measure of economic development that is insufficient to explain variations in income inequality. Therefore, new measures of economic development are necessary". (…)
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Suggested Citation

  • Dominik Hartmann & Cristian Jara-Figueroa & Cesar Hidalgo, 2017. "Is a country's ability to generate and distribute income determined by its productive structure?," One Pager Arabic 369, International Policy Centre.
    • Handle: RePEc:ipc:oparab:369
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