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The Welfare Implications of Growth Regressions

  • Donal O.Neill


    (Economics Dept., NUI Maynooth, Co. Kildare, Ireland)

Regressions relating the growth rate in income to initial income have been the source of much recent debate in growth economics. Recent research has emphasised the importance of allowing for non- linearities in these models when explaining the evolution of income over time. In this paper we argue these extended growth regressions are also useful in facilitating welfare comparisons across income dis- tributions, in a way that is not possible using alternative measures of convergence. To do this we exploit the similaritites between the in- come convergence literature and work on tax progressivity in the pub- lic .nance literature. We illustrate our approach using both regional data across the United States, Japan and Europe and countrywide comparisons.

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Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n1570505.

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Length: 23 pages
Date of creation: May 2005
Date of revision:
Handle: RePEc:may:mayecw:n1570505
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