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Income inequality and economic growth¡ª¡ªthe Kuznets curve revisited

Author

Listed:
  • YIN Heng

    (School of Economics, Beijing Normal University, Beijing, 100875, China)

  • GONG Liutang

    (Guanghua School of Management, Peking University, Beijing, 100871, China)

  • ZOU Heng-fu

    (Guanghua School of Management, Peking University, Beijing, 100871, China)

Abstract

In a neoclassical growth framework with a typical political-economy mechanism, this paper reexamines the relationship between the income inequality and economic growth by introducing government spending into the production function and the utility function. It demonstrates that Kuznets famous inverted-U shape relationship between inequality and economic growth will hold the growth rate will be first increasing with the income inequality before the growth rate decreases with inequality.

Suggested Citation

  • YIN Heng & GONG Liutang & ZOU Heng-fu, 2006. "Income inequality and economic growth¡ª¡ªthe Kuznets curve revisited," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 1(2), pages 196-206, June.
    • Handle: RePEc:fec:journl:v:1:y:2006:i:2:p:196-206
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-006-0004-7
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    Citations

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    Cited by:

    1. Nazifi Abdullahi Darma & Muhammad Ali, 2014. "An Empirical Analysis of the Effect of Income Inequality on Economic Growth in West Africa," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(4), pages 221-231.
    2. Zouheir ABIDA & Imen Mohamed SGHAIER, 2012. "Economic Growth and Income Inequality: Empirical Evidence from North African Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 142-154, March.

    More about this item

    Keywords

    income distribution; growth; political-economy mechanism;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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