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Inequality, Growth, and Investment

  • Robert J. Barro

Evidence from a broad panel of countries shows little overall relation between income inequality and rates of growth and investment. However, for growth, higher inequality tends to retard growth in poor countries and encourage growth in richer places. The Kuznets curve-whereby inequality first increases and later decreases during the process of economic development-emerges as a clear empirical regularity. However does not explain the bulk of variations in inequality across countries or over time.

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File URL: http://www.nber.org/papers/w7038.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7038.

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Date of creation: Mar 1999
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Publication status: published as Hassett, K.A. and R.G. Hubbard (eds.) Inequality and Tax Policy. AEI Press, 2001.
Handle: RePEc:nbr:nberwo:7038
Note: EFG
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  19. 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.
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