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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
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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  9. Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
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  14. Venieris, Yiannis P & Gupta, Dipak K, 1986. "Income Distribution and Sociopolitical Instability as Determinants of Savings: A Cross-sectional Model," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 873-83, August.
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  17. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
  18. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-40, June.
  19. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  20. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, vol. 83(5), pages 1184-98, December.
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  24. Piketty, Thomas, 1997. "The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 173-89, April.
  25. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
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