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Inequality, Growth, and Investment

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  • Robert J. Barro

Abstract

Evidence from a broad panel of countries shows little overall relation between income inequality and rates of growth and investment. However, for growth, higher inequality tends to retard growth in poor countries and encourage growth in richer places. The Kuznets curve-whereby inequality first increases and later decreases during the process of economic development-emerges as a clear empirical regularity. However does not explain the bulk of variations in inequality across countries or over time.

Suggested Citation

  • Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7038
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    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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