Inequality or poverty: which is bad for growth?

Robert Breunig and Omer Majeed

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: Recent research has highlighted a negative impact of inequality on economic growth. We re-evaluate this hypothesis focusing on both inequality and poverty and their interaction. We replicate previous results showing that inequality has a negative impact on growth. However, we show that when we account for both inequality and poverty, the negative effect of inequality on growth appears to be concentrated amongst countries with high poverty. This would argue for policies targeted towards alleviating poverty rather than policies about redistribution.

Keywords: Inequality; Economic Growth; Poverty; Cross-Country Regressions (search for similar items in EconPapers)
JEL-codes: D63 I39 O47 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-07
New Economics Papers: this item is included in nep-ger and nep-gro
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2016-43

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