Abstract
SummaryThe relationship between inequality and growth has attracted a lot of attention in the previous literature. Estimation of this relationship may be biased by simultaneity, omitted variables and measurement error. The present paper contributes to the existing work by introducing the wealth Gini coefficient as a new inequality measure. The most reliable and recent data on income inequality are used for estimation. We employ the Arellano-Bond GMM estimation technique and we find that there seems to be a positive relationship between wealth inequality and real per capita GDP growth, but this relationship is not robust to different model specifications.
Highlights
The aim of this paper is to analyze the relationship between inequality and economic growth
Our main contribution is the use of the wealth Gini coefficient as a measure ofinequality; in the previous literature, the relationship between wealth inequality and GOP growth has rarely been studied
We argue that point-in-time income inequality measures, such as the income Gini coefficient, are unsatisfactory measures oflifetime income inequality
Summary
The aim of this paper is to analyze the relationship between inequality and economic growth. To this objective, we compare the impact of income inequality and wealth inequality on real per capita GOP growth. Our main contribution is the use of the wealth Gini coefficient as a measure ofinequality; in the previous literature, the relationship between wealth inequality and GOP growth has rarely been studied. Considerable efforts have been devoted to assessing the impact of inequality on economic growth. Most of the previous research focused on income inequality rather than on wealth inequality, due to data scarcity on the latter. The impact ofwealth inequality on economic growth has rarely been analyzed in the literature. In the few studies that have tackled this issue, wealth concentration has been studied by means of proxies, e.g. the number of billionaires present in the countries, due to the impossibility of constructing a proper wealth Gini coefficient
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call