Income inequality and economic growth¡ª¡ªthe Kuznets curve revisited

Heng Yin, Liutang Gong and Heng-Fu Zou ()

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2006, vol. 1, issue 2, 196-206

Abstract: In a neoclassical growth framework with a typical political-economy mechanism, this paper reexamines the relationship between the income inequality and economic growth by introducing government spending into the production function and the utility function. It demonstrates that Kuznets famous inverted-U shape relationship between inequality and economic growth will hold the growth rate will be first increasing with the income inequality before the growth rate decreases with inequality.

Keywords: income distribution; growth; political-economy mechanism (search for similar items in EconPapers)
JEL-codes: D31 E62 J13 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:1:y:2006:i:2:p:196-206

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