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Is Inequality Harmful for Growth

Is Inequality Harmful for Growth Some economic commentators claim that inequality of wealth or income reduces economic development and growth of GDP. But this is counterintuitive, since economic breakthroughs usually occur by dint of great effort, or discovery, or invention, which brings great wealth to those responsible think Bill Gates. Nor is this thesis supported by a proper interpretation of the facts of the matter, despite the contentions of several authors in this regard. Torsten Persson and Guido Tabellini 1994 hence, PT have an interesting thesis. It is that inequality is harmful for economic growth. That is, ceteris paribus, the more equal is the income or wealth distribution, the better are a country's prospects for economic development. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Humanomics Emerald Publishing

Is Inequality Harmful for Growth

Humanomics , Volume 16 (2): 7 – Feb 1, 2000

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0828-8666
DOI
10.1108/eb018853
Publisher site
See Article on Publisher Site

Abstract

Some economic commentators claim that inequality of wealth or income reduces economic development and growth of GDP. But this is counterintuitive, since economic breakthroughs usually occur by dint of great effort, or discovery, or invention, which brings great wealth to those responsible think Bill Gates. Nor is this thesis supported by a proper interpretation of the facts of the matter, despite the contentions of several authors in this regard. Torsten Persson and Guido Tabellini 1994 hence, PT have an interesting thesis. It is that inequality is harmful for economic growth. That is, ceteris paribus, the more equal is the income or wealth distribution, the better are a country's prospects for economic development.

Journal

HumanomicsEmerald Publishing

Published: Feb 1, 2000

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