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Does inequality hamper long run growth? Evidence from Emerging Economies
Published in Elsevier
2016
Volume: 52
   
Pages: 99 - 113
Abstract
In this paper, we analyse the simultaneous relationship between growth, distribution and re-distribution in selected twenty nine Emerging Economies. The analysis is premised on the distinction between market induced inequality, conceived as distribution, and the outcome post- government intervention as redistribution. Three issues emerge from our analysis; the lack of consistent data and uniform definition of ‘inequality’ in the empirical literature, the difficulty in establishing definitive causation between growth and the other two variables, and the complex linkages between growth, distribution and re-distribution, Our results show that, controlling for re-distributive transfers, inequality has a significant detrimental effect on growth in the long run. Further, we find no trade-off between re-distribution and growth both in the long run and short run. © 2016 Economic Society of Australia, Queensland
About the journal
JournalData powered by TypesetEconomic Analysis and Policy
PublisherData powered by TypesetElsevier
ISSN03135926
Open AccessNo