Inequality and Economic Growth: The Perspective of the New Growth Theories

Cecilia Garcia-Penalosa, Eve Caroli and Philippe Aghion

Journal of Economic Literature, 1999, vol. 37, issue 4, 1615-1660

Abstract: We analyze the relationship between inequality and economic growth from two directions. The first part of the survey examines the effect of inequality on growth, showing that when capital markets are imperfect, there is not necessarily a trade-off between equity and efficiency. It therefore provides an explanation for two recent empirical findings, namely, the negative impact of inequality and the positive effect of redistribution upon growth. The second part analyzes several mechanisms whereby growth may increase wage inequality, both across and within education cohorts. Technical change, and in particular the implementation of "General Purpose Technologies," stands as a crucial factor in explaining the recent upsurge in wage inequality.

JEL-codes: J31 O11 O15 O41 (search for similar items in EconPapers)
Date: 1999
Note: DOI: 10.1257/jel.37.4.1615
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (955)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jel.37.4.1615 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Inequality and economic growth: the perspective of the new growth theories (1999)
Working Paper: Inequality and Economic Growth: The Perspective of the New Growth Theories (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jeclit:v:37:y:1999:i:4:p:1615-1660

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Literature is currently edited by Steven Durlauf

More articles in Journal of Economic Literature from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().