Inequality and growth

Inequality and growth

Updated May 2006


Aghion, Philippe, Caroli, Eve and Garcia-Penalosa, Cecilia (1999). Inequality and economic growth: the perspective of the new growth theories. Journal of Economic Literature, 37(4), December, 1615-1660.

Perotti, R. (1996). Democracy, income distribution and growth: What the data say, Journal of Economic Growth, 1, June, 149-187.

Key references

Aghion, P. and P. Bolton (1997). A trickle-down theory of growth and development. Review of Economic Studies, 64, 151-172.

Alesina, A. and Perotti, R. (1994). The political economy of growth: a critical survey of the recent literature. World Bank Economic Review, 8, 351-371.

Alesina A. and D. Rodrik (1994). Distributive politics and economic growth. Quarterly Journal of Economics, 465-490.

Banerjee, A. and A. Newman (1993). Occupational choice and the process of development. Journal of Political Economy, 58, 211-235.

Barro, Robert J. (2000). Inequality and growth in a panel of countries. Journal of Economic Growth, 5(1), March, 87-120.

Benabou, R. (1996). Inequality and growth. NBER macroeconomics annual, 11-76.

New! Bourguignon, Francois and Verdier, Thierry (2000). Oligarchy, democracry, inequality and growth. Journal of Development Economics, August, 62(2), 285-313.

Castello, Amparo and Domenech, Rafael (2002). Human capital inequality and economic growth: some new evidence. Economic Journal, 112(478), C187-200.

Chang, Roberto (1998). Political party negotiations, income distribution, and endogenous growth. Journal of Monetary Economics, 41(2), April, 227-255.

Deininger, Klaus and Lyn Squire (1996). A new data set measuring income inequality. World Bank Economic Review, 10(3), September, 565-91.

Deininger, K. and L. Squire (1997). Economic growth and income inequality: reexamining the links. Finance and Development, March, 38-41.

Deininger, Klaus and Lyn Squire (1998). New ways of looking at old issues: inequality and growth. Journal of Development Economics, 57(2), 259-287.

Forbes, K. J. (2000). A reassessment of the relationship between inequality and growth. American Economic Review, September, 90(4), 869-887.

Galor, Oded and Joseph Zeira (1993). Income distribution and macroeconomics, Review of Economic Studies, 60, 35-52.

Lloyd-Ellis, H. and Bernhardt, D. (2000). Enterprise, inequality and economic development. Review of Economic Studies.

Owen, Ann L. and Weil, David N. (1998). Intergenerational earnings mobility, inequality and growth. Journal of Monetary Economics, 41(1), February, 71-104.

Persson T. and G. Tabellini (1994). Is inequality harmful for growth? American Economic Review, 84, 600-621.

Tanzi, Vito and Chu, Ke-Young (eds.) (1998). Income distribution and high-quality growth. MIT Press, Cambridge, Mass.

Other references

Aghion, P. and P. Bolton (1992). Distribution and growth in models of imperfect capital markets. European Economic Review, 36, 603-611.

Alesina, A. and Perotti, R. (1996). Income distribution, political instability, and investment. European Economic Review, 40(6), June, 1203-1228.

Assane, Djeto and Grammy, Abbas (2003). An Assessment of the Growth and Inequality Causality Relationship. Applied Economics Letters, November, 10(14), 871-73.

Balisacan, Arsenio M. and Fuwa, Nobuhiko (2003). Growth, Inequality and Politics Revisited: A Developing-Country Case. Economics Letters, April, 79(1), 53-58.

Banerjee, Abhijit V and Duflo, Esther (2003). Inequality and Growth: What Can the Data Say? Journal of Economic Growth, September, 8(3), 267-99.

Benabou, R. (1996). Equity and efficiency in human capital investment: the local connection, Review of Economic Studies, 63, 237-264.

Bhattacharya, Joydeep (1998). Credit market imperfections, income distribution, and capital accumulation. Economic Theory, January, 11, 171-200.

Birchenall, Javier A. (2001). Income distribution, human capital and economic growth in Colombia. Journal of Development Economics, October, 66(1), 271-287.

Bleaney, Michael and Nishiyama, Akira (2004). Income Inequality and Growth–Does the Relationship Vary with the Income Level? Economics Letters, September, 84(3), 349-55.

Carter, Michael R. and Zimmerman, Frederick J. (2000). The dynamic cost and persistence of asset inequality in an agrarian economy. Journal of Development Economics, December, 63(2), 265-302.

Chen, Been Lon (2003). An Inverted-U Relationship between Inequality and Long-Run Growth. Economics Letters, February, 78(2), 205-12.

Chen, Hung Ju (2005). Educational Systems, Growth and Income Distribution: A Quantitative Study. Journal of Development Economics, April, 76(2), 325-53.

Chiu, W. (1998). Income inequality, human capital accumulation and economic performance. Economic Journal, 108, 44-59.

Clarke, G. R. G. (1995). More evidence on income distribution and growth. Journal of Development Economics, 47(2), August 1995, 403-427.

de la Croix, David and Doepke, Matthias (2003). Inequality and Growth: Why Differential Fertility Matters. American Economic Review, September, 93(4), 1091-1113.

Durlauf, S. (1996). A theory of persistent income inequality, Journal of Economic Growth, 1, March, 75-93.

New! Eicher, Theo S. and Garcia-Penalosa, C. (2001). Inequality and growth: the dual role of human capital in development. Journal of Development Economics, 66(1), 173-97.

Fields, Gary S. (1994). Data for measuring poverty and inequality changes in the developing countries. Journal of Development Economics, 44(1), 87-102.

Fishman, Arthur and Simhon, Avi (2002).The Division of Labor, Inequality and Growth. Journal of Economic Growth, June, 7(2), 117-36.

Galor, Oded (2000). Income Distribution and the Process of Development. European Economic Review, May, 44(4-6), 706-12.

Galor, Oded and Moav, Omer (1999). From physical to human capital: inequality in the process of development. CEPR working paper no. 2307.

Galor, Oded and Moav, Omer (2000). Ability based technological transition, wage inequality and economic growth. Quarterly Journal of Economics, May, 469-497.

Galor, Oded and Moav, Omer (2000). Das Human Kapital. Manuscript, Hebrew University of Jerusalem.

Galor, O. and D. Tsiddon (1994). Human capital distribution, technological progress, and economic growth, CEPR working paper no. 971.

Garcia-Penalosa, C. (1995). The paradox of education or the good side of inequality, Oxford Economic Papers, 47, 265-285.

Gould, Eric, Omer Moav and Bruce Weinberg (2000). Precautionary demand for education, inequality and technological progress. The Maurice Falk Institute for Economic Research, discussion paper no. 00/03.

Gradstein, Mark (2002). Rules, stability and growth. Journal of Development Economics, 67(2), 471-484.

Lloyd-Ellis, Huw (1999). Endogenous technological change and wage inequality. American Economic Review, 89(1), March, 47-77.

Lloyd-Ellis, Huw (2000). Public education, occupational choice and the growth-inequality relationship. International Economic Review, 41(1), February.

Maoz, Yishay D. and Moav, Omer (2000). Intergenerational mobility and the process of development. Economic Journal, October, 109, 677-697.

Maoz, Yishay D. and Moav, Omer (2000). Capital-skill complementarity, inequality and development. The Maurice Falk Institute for Economic Research, discussion paper no. 00/09.

Moav, Omer (2002). Income Distribution and Macroeconomics: The Persistence of
Inequality in a Convex Technology Framework. Economics Letters, April, 75, 187-192.

Panizza, Ugo (2002). Income Inequality and Economic Growth: Evidence from American Data. Journal of Economic Growth, March, 7(1), 25-41.

Partridge, Mark D. (1997). Is inequality harmful for growth? Comment. American Economic Review, 87(5), December, 1019-1032.

Perotti, R. (1993). Political equilibrium, income distribution and growth, Review of Economic Studies, 60, 755-776.

Pham, Thi Kim Cuong (2005). Economic Growth and Status-Seeking through Personal Wealth. European Journal of Political Economy, June, 21(2), 407-27.

Sylwester, Kevin (2000). Income inequality, education expenditures, and growth. Journal of Development Economics, December, 63(2), 379-398.

Thornton, John (2001). The Kuznets Inverted-U Hypothesis: Panel Data Evidence from 96 Countries. Applied Economics Letters, January, 8(1), 15-16.

Vicente, Juan and Borge, Luis (2000). Inequality and Growth: Inverted and Uninverted U-Shapes. Applied Economics Letters, August, 7(8), 497-500.

Yorukoglu, Mehmet (2002). The Decline of Cities and Inequality. American Economic Review, May, 92(2), 191-97.

Zweimuller, Josef (2000). Schumpeterian entrepreneurs meet Engel’s Law: the impact of inequality on innovation-driven growth. Journal of Economic Growth, June, 5(2), 185-206.


  1. Could you please send references that are more related to the question of Inequality being neccessary to economic growth in South Africa?

  2. Hi, I can’t think of particular references on that specific question. In general (i.e. not just in relation to South Africa) it can be argued that inequality is needed to maintain incentives, and that high inequality promotes high saving rates; but the empirical literature is ambiguous. A good empirical paper is Perotti (Journal of Economic Growth 1996).

  3. Hi there,
    This may seem like a silly question but I’m having trouble finding these articles. How exactly can one get hold of the journals?

  4. Most of these journals are written with an academic readership in mind, so the usual way to access them would be via a university library, or another institution with multiple journal subscriptions. But in some cases, you may well be able to track down working paper versions freely available online. For papers in economics, the IDEAS database would often be the best place to start; and is also worth trying.

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