Does wealth inequality matter for growth? The effect of billionaire wealth, income distribution, and poverty

Sutirtha Bagchi and Jan Svejnar

Journal of Comparative Economics, 2015, vol. 43, issue 3, 505-530

Abstract: A fundamental question in social sciences relates to the effect of wealth inequality on economic growth. Yet, in tackling the question, researchers have had to use income as a proxy for wealth. We derive a global measure of wealth inequality from Forbes magazine's listing of billionaires and compare its effect on growth to the effects of income inequality and poverty. Our results suggest that wealth inequality has a negative relationship with economic growth, but when we control for the fact that some billionaires acquired wealth through political connections, the relationship between politically connected wealth inequality and economic growth is negative, while politically unconnected wealth inequality, income inequality, and initial poverty have no significant relationship.

Keywords: Economic growth; Wealth inequality; Income inequality; Billionaires; Political connections (search for similar items in EconPapers)
JEL-codes: D31 O40 O43 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (71)

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Related works:
Working Paper: Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty (2014)
Working Paper: Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:43:y:2015:i:3:p:505-530

DOI: 10.1016/j.jce.2015.04.002

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