Does a rising tide raise all ships? The impact of growth on inequality

Dustin Chambers

Applied Economics Letters, 2010, vol. 17, issue 6, 581-586

Abstract: Using semiparametric methods and an up-to-date panel dataset on income inequality, the impact of past economic growth on current inequality is examined in a group of nations with widely differing initial incomes. Regardless of a nation's initial development, past economic growth stimulates inequality over short and medium-run periods. However, in the long-run, inequality in developed and developing nations reacts differently to comparable rates of economic growth. Specifically, inequality declines with growth in developing nations, while rising with growth in developed nations.

Date: 2010
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DOI: 10.1080/13504850802046971

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