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Inequality and economic growth in Bangladesh- a diversified evidence on Kuznets pattern 'U' hypothesis

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Abstract

The study of inequality and economic growth to the developing countries are now a days a comprehensive issue since growth stimulate the standard of living to the poor people and accordingly reduce income inequality.The improvement of inequality and growth may reduce the social movement to the government and may keep the economic and social integrity amongst the different ethnic groups by efficient resource allocation and income redistribution in Bangladesh. The objective of this research is to assess the long term relationship between inequality and growth in Bangladesh with a methodology of Kuznets pattern inverted U hypothesis first introduced by Simon Kuznets since 1955. The popular concept of Kuznets hypothesis suggests that as economic growth occurs,income inequality first increase and then decline after a certain turning point. The study of Kuznets hypothesis is popular to the international economic environment rather than domestic, especially to the developing countries where the per capita GDP is below the level of world average. This study found the evidence that the presumption of Kuznets hypothesis has satisfy in the economy of Bangladesh in national level. In low income countries, structural adjustment is necessary to satisfy the Kuznets hypothesis.

Suggested Citation

  • S M A, Islam, 2009. "Inequality and economic growth in Bangladesh- a diversified evidence on Kuznets pattern 'U' hypothesis," MPRA Paper 34980, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:34980
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    File URL: https://mpra.ub.uni-muenchen.de/34980/1/MPRA_paper_34980.pdf
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    References listed on IDEAS

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    1. Jha, Sailesh K., 1996. "The Kuznets curve: A reassessment," World Development, Elsevier, vol. 24(4), pages 773-780, April.
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    Keywords

    Kuznets Hypothesis; Inequality; Growth;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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