Inequality and Growth Revisited

Robert J. Barro

No 11, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: This paper updates and extends the work of Barro (2000). International data confirm the presence of the Kuznets curve-an inverse-U shape relationship between income inequality and per capita GDP-that is relatively stable from the 1960s into the 2000s. The direct effect of international openness on income inequality is also found to be positive. On the other hand, a cross-country-growth equation shows a negative effect of income inequality on economic growth, holding fixed a familiar set of other explanatory variables. This effect diminishes as per capita GDP rises and may be positive for the richest countries.

Keywords: inequality; growth; Kuznets curve; Gini coefficient (search for similar items in EconPapers)
JEL-codes: I31 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-ltv
Date: 2008-01-01

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Persistent link: http://EconPapers.repec.org/RePEc:ris:adbrei:0011

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