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Is distribution of wealth harmful for economic growth?

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  • Miguel Flores

    (Egresado de la Facultad de Economía de la UANL, con estudios doctorales en la Universidad de Essex, Inglaterra.)

Abstract

There have been numerous studies related to the explanation of economic inequality and its relationship with economic growth since the seminal paper of Kuznets (1955). This work motivated researchers to evaluate whether a reduction in income inequality improves economic performance. Inequality as an economic problem has significant effects upon political and social sectors in the modern society. Insights about economic inequality are mainly obtained from studying the structure of income distribution and its effects on economic growth and social stability. The objective of this essay is to analyse the relationship between income distribution and growth. In the first section, the central arguments of the most influential economic growth theories will be presented. In the second section, the historical discussion involving the relationship between income distribution and economic growth will be outlined. In the following section, the basic characteristics of models linking inequality and growth will be examined. Finally, in the last section the recent literature regarding income distribution, social instability and economic growth will be addressed.

Suggested Citation

  • Miguel Flores, 2005. "Is distribution of wealth harmful for economic growth?," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 53-65, May.
    • Handle: RePEc:ere:journl:v:xxiv:y:2005:i:1:p:53-65
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    3. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
    4. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    5. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
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