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Inequality, poverty and economic growth

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  • Breunig, Robert
  • Majeed, Omer

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 even if they have no effect on inequality.

Suggested Citation

  • Breunig, Robert & Majeed, Omer, 2020. "Inequality, poverty and economic growth," International Economics, Elsevier, vol. 161(C), pages 83-99.
    • Handle: RePEc:eee:inteco:v:161:y:2020:i:c:p:83-99
    DOI: 10.1016/j.inteco.2019.11.005
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    More about this item

    Keywords

    Inequality; Economic growth; Poverty; Cross-country regressions;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other

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