Economic growth and income inequality

🤖 Plain-English Summary

In recent years the problem of economic inequalities has become one of the most often discussed problems in economics. The findings keep the door open to further analyses aimed at the identification and exploration of more significant determinants that could conclusively verify the relation between inequalities and economic development.

🔑 Key Findings

• Even though from neoclassical perspective inequalities should not have negative impact on economy, still the relation between inequalities and economic growth is not obvious.
• Traditionally, the starting point in this discussion is Simon Kuznets concept, according to which inequality rises in the early phases of economic development and decreases as the growth takes place.
• The empirical verification of this concept has been investigated, but the evidence is ambiguous.

🔗 Related Resources