Autore: Waldmann, Robert
Titolo: Inequality, economic growth and the debt crisis
Periodico: European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1994 - Fascicolo: 40 - Pagina iniziale: 1 - Pagina finale: 33

High initial income inequality is correlated with slow per capita GNP growth in a cross section of countries. There are many theoretical explanations of this pattern each of which suggests that the correlation should be eliminated when additional explanatory variables are added to the regression. This paper reports only weak evidence for each of the theories considered. On the other hand it is noted that the correlation of income inequality with slow growth in the 1980s is much more negative that the correlation with growth in the 1960s and 1970s and that this correlation is strikingly reduced when an indicator variable for rescheduling of debt repayment is included in the regression. This paper suggests that unequal income distribution is correlated with slow growth because it is correlated with difficulties in debt repayment in the 1980s. This suggests a causal connection which has received relatively little emphasis in the theoretical literature.


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Testo completo: http://hdl.handle.net/1814/519

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