Inequalities and growth: Are there good and bad inequalities?

François Facchini

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Abstract: This article maintains that we can escape from the deadlock in which the relationship inequalities/growth theory finds itself by using the entrepreneurial theory to explain a country's economic growth. The idea is the following: As with cholesterol, there exist good and bad inequalities. The bad inequalities are the result of rent seeking activities, while good inequalities originate in productive activity or entrepreneurial profit seeking. We could then reinterpret the empiric studies proposed by quantitative economics and show that inequalities harm growth in countries where the institutions incite unproductive entrepreneurial activity when it is good for growth where it is the result of profit seeking entrepreneurial activity.

Keywords: Baumol hypothesis; inequalities; growth; property right and entrepreneur; hypothèse de Baumol; inégalités; croissance; droit de propriété et entrepreneur (search for similar items in EconPapers)
Date: 2007
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Published in Public Choice Spciety, 2007, San Antonio (USA), United States

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00270483

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