Anales de la XLVIII Reunión Anual de la Asociación Argentina de Economía Política - Income Inequality and Economic Growth: New Evidence from Latin America

Congress

Summary *

This paper explores the relationship between inequality of income distribution and economic growth for 20 Latin American and the Caribbean countries during the period 1980-2010. Our results are somehow eclectic. They show that the features of such a relationship depend heavily on the level of income. In general inequality is harmful for economic growth, which supports the ?political economy? approach. In turn, in the upper tail of the richer countries income distribution, higher inequality encourages economic growth and, therefore, the relation becomes positive. Hence, redistributive economic policies should be focused especially on those at the bottom of the income distribution, given that they appear to play a key role in improving economic development. Information provided by the agent in SIGEVA