Inequality and Growth: Theory and Policy Implications

Even minute increases in a country's growth rate can result in dramatic changes inliving standards over just one generation. The benefits of growth, however, may not be sharedequally. Some may gain less than others, and a fraction of the population may actually bedisadvantaged. Recent economic research has found both positive and negative relationships betweengrowth and inequality across nations. The questions raised by these results include: What is theimpact on inequality of policies designed to foster growth? Does inequality by itself facilitate ordetract from economic growth, and does it amplify or diminish policy effectiveness?This bookprovides a forum for economists to examine the theoretical, empirical, and policy issues involved inthe relationship between growth and inequality. The aim is to develop a framework for determiningthe role of public policy in enhancing both growth and equality. The diverse range of topics,examined in both developed and developing countries, includes natural resources, taxation,fertility, redistribution, technological change, transition, labor markets, and education. A themecommon to all the essays is the importance of education in reducing inequality and increasinggrowth.