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Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data

  • Knowles, Stephen

Almost all the recent empirical work on the relationship between income inequality and economic growth has used inequality data that are not consistently measured. This article argues that this is inappropriate and shows that the significant negative correlation often found between income inequality and growth across countries may not be robust when income inequality is measured in a consistent manner. However, evidence is found of a significant negative correlation between consistently measured inequality of expenditure data and economic growth for a sample of developing countries.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/dp2001/dp2001-128.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2001/128.

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Length: 24 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:unu:wpaper:dp2001-128
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  4. Keefer, Philip & Knack, Stephen, 2002. " Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-54, March.
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  12. Deininger, Klaus & Olinto, Pedro, 2000. "Asset distribution, inequality, and growth," Policy Research Working Paper Series 2375, The World Bank.
  13. Hongyi Li & Heng-fu Zou, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," CEMA Working Papers 74, China Economics and Management Academy, Central University of Finance and Economics.
  14. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
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  18. Stephen Knowles & Paula K. Lorgelly, 2002. "Are educational gender gaps a brake on economic development? Some cross-country empirical evidence," Oxford Economic Papers, Oxford University Press, vol. 54(1), pages 118-149, January.
  19. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
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  23. Stephan Klasen, 2002. "Low Schooling for Girls, Slower Growth for All? Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development," World Bank Economic Review, World Bank Group, vol. 16(3), pages 345-373, December.
  24. Sylwester, Kevin, 2000. "Income inequality, education expenditures, and growth," Journal of Development Economics, Elsevier, vol. 63(2), pages 379-398, December.
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  26. Atkinson, A.B. & Brandolini, A., 2000. "Promise and Pitfalls in the Use of 'Secondary' Data -Sets: Income Inequality in OECD Countries," Papers 379, Banca Italia - Servizio di Studi.
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  30. Birdsall, Nancy & Ross, David & Sabot, Richard, 1995. "Inequality and Growth Reconsidered: Lessons from East Asia," World Bank Economic Review, World Bank Group, vol. 9(3), pages 477-508, September.
  31. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
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