Income Distribution, Poverty Trap and Economic Growth

Masako Oyama, 昌子 大山 and マサコ オオヤマ

No 106, Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: The post-war growth experiences of developing countries lead to the idea that income equality may accelerate economic growth. In this paper, a theoretical model showed the possibility that equality makes a country human-capital abundant, which enables industrialization and higher economic growth. On the other hand, in unequal developing countries where majority of people manage to survive at minimum consumption level, human capital investment such as schooling cannot be done. Such countries become unskilled labor abundant and suffer further from low economic growth. In addition, the two-good framework showed the possibility that protecting infant industry with dynamic externality enhances economic growth.

Keywords: income distribution; economic growth; human capital; comparative advantage; learning-by-doing (search for similar items in EconPapers)
JEL-codes: F11 O15 O41 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-08
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Persistent link: https://EconPapers.repec.org/RePEc:hit:piedp1:106

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