Inequality and Growth in a Panel of Countries

“Similar conclusion has been drawn by Barro (2000).”

“According to Barro (2000), trading openness lowers income inequality in developing countries and raises it in developed countries.”

“For example, Barro (2000) shows evidence that trading openness lowers income inequality in poor countries but raises it in rich countries.”

“Many scholars have investigated the effects of economic growth on the income gap (Barro 2000; Kuznets 1955).”

“…investment (Bourguignon, 1981), human and physical capital accumulation (Galor and Zeira, 1993; Banerjee and Newman, 1993; Aghion and Bolton, 1997; Barro, 2000; Galor and Moav, 2004), and income redistribution and social unrest (Persson and Tabellini, 1994; Alesina and Rodrik, 1994; Benabou,…”

“While the agricultural sector features low per capita income and relatively little inequality within the sector (Barro, 2000), in the process of development, the inequality within rural sector may increase while the agricultural sector reduces its size, in which only a subset of households is…”

“…of empirical studies diverged on the link between inequality and growth with some studies finding no relationship between inequality and growth e.g. Barro (2000), and Lopez (2004); while some found negative relationship moving from inequality to growth, e.g. Alesina and Rodrick (1994), Alesina and…”

“And, indeed, in the macroeconomic literature there seems to be little or no positive relationship between growth and inequality [40,41], and a good case has been made in numerous studies for a strong negative relationship [42–45].”

“Barro (2000) and Spilimbergo el al.”

“Barro (2000), using a larger sample and three stages least squares (3SLS), finds a positive relationship between income inequality and growth in developed countries and a negative relationship between income inequality and growth in developing countries.”

“Förster and Tóth (2015) reviewed that the empirical literature on the relationship between economic development and inequality yields inconclusive evidence, with some studies supporting the Kuznets hypothesis (Barro 2000) and others rejecting it (Ravallion 1995).”

“Hence, poor households do not have financial opportunities to transform their economic status for long-term human and physical investments (Aghion & Bolton, 1997; Barro, 2000; Rashid & Intartaglia, 2017).”

“In line with the pattern shown before, columns (2-7) reveal negative coeffi cients for the ratio of education at the younger ages, 15-19 and 20-29, and positive estimates for the remaining age groups.”

“Similarly, studies on inequality seem to agree that higher inflation leads to higher inequality, while more and better infrastructure and more human capital lead to lower inequality (Barro, 2000; Dabla-Norris, Kochhar, Suphaphiphat, Ricka, & Tsounta, 2015; Li & Zou, 2002; Lopez, 2004; Lundberg & Squire, 2003).”

“Evidence on educational attainment is from the Barro and Lee (2010) database, and McMillan and Rodrik (2011) is the source of sectoral employment and value added data.”

“…in economics and they can be found in various contexts.10 10A small selection of 3SLS applications in economics: Buck & Hakim (1982), Audretsch & Feldman (1996), Burnside (1996), Barro (2000), Glewwe et al. (2001), Burton et al. (2002), Butkiewicz & Yanikkaya (2005) and Brown & Alexander (2005).”

“Barro (2000) finds that inequality indeed has a negative impact on growth in poor countries, but a positive effect on growth in rich countries [2].”

“2 See for instance, Bourguignon and Morisson (1990); Li, Squire and Zou (1998); Barro (2000); Dollar and Kraay (2002, 2004) and Lundberg and Squire (2003).”

“For example, Barro (2000) nds that the Kuznets curve emerges in a broad panel of countries.”

“and economic growth, openness is often associated with increased inequality ( Barro, 2000;”

“These factors can have a negative impact on investment and, consequently, hinder growth and development (Alesina & Perotti 1996; Barro 2000).”

“Barro (2000) finds that income inequality raises growth for developed economies.”

“The empirical evidence regarding both the direction [25–27] and the sign of the relationship between income inequality and economic growth is mixed, with some arguing that the latter may be impacted by many other factors such as technological advancements [23, 25].”

“Others, such as Barro (2000) defines the space between the second- and fourth- income quintiles, and Alesina and Perotti (1996) define the space between the third- and fourth- income quintiles.”

“The following papers made a significant contribution to the study of inequality: Barro (2000), Kaldor (1955), Aghion et al. (1999).”

“As for open, trade theory suggests that its effects on income distribution are ambiguous as they are associated with factor endowment (Barro, 2000).”

“1 Examples of studies that fail to support the hypothesis include Papanek and Kyn (1986), Ram (1991), Anand and Kanbur (1993), Deininger and Squire (1996), Chen and Ravallion (1997), Jacobsen and Giles (1995), Li et al (1998), Barro (2000), Dollar and Kraay (2002), and Frank (2009).”

“Selanjutnya temuan penelitian ini juga konsisten dengan bukti empiris yang ditemukan oleh Barro (2000) dan Huang et al. (2015) bahwa di negara berpendapatan rendah (low-income developing countries) terdapat hubungan negatif antara ketimpangan pendapatan dan pertumbuhan ekonomi.”

“…to sustain incentives, excessive inequality can result in misallocation of resources and be harmful to economic growth (e.g., Aghion et al., 1999; Barro, 2000) and other important societal outcomes such as crime (e.g., Kelly, 2000), health (e.g., Deaton, 2003), or trust (e.g., Gustavsson &…”

“Empirical evidences are also mixed (Deininger and Squire 1998), and Barro (2000) find little overall relation between income inequality and economic growth rates when rich and poor countries are pooled together. In sum, many studies have sought to identify the causal factors that influence the evolution of economic gr…”

“In the same vein, while the negative coefficient on GDP partly contradicts the popular findings (Barro 2000; Reuveny and Li 2003), a little over two decades may not be adequate to realistically capture the time series relationships.”

“There is evidence that inequality slows growth in both low-income and high-income countries (Barro 2000, Barro 2008, Banerjee & Duflo 2003), but also evidence that inequality may be beneficial for transitional growth in low-income countries (Brueckner & Lederman 2018).”

“In this regard, most researchers have found that the relationship is negative in low-income countries and positive in high-income countries (Barro, 2000; Brueckner & Lederman, 2018; Castelló-Climent, 2010; Halter et al., 2014).”

“It applies the principles of biological fitness and natural selection to explain the equilibrium evolution of mutation mechanisms 47,48 .”

“As an example of previous empirical works on this subject, Barro (2000), using a panel estimator, showed that the effects of international trade on income inequality depend on the factor endowment of each country.”

“In contrast, Barro (2000) concludes that the effect of income inequality on economic growth depends on the state of economic development: income inequality in poor countries affects negatively economic growth, but income inequality in rich countries affects it positively.”

“2010; Beltrán Tapia et al. 2018). Apart from these structural changes, demographic pressures may have also played a role in this process because population growth, by expanding the labor force supply, tends to prevent wages from rising (Lindert and Williamson 1985, 354–55). Similarly, demographic growth in rural areas…”

“The theoretical background for this is derived from neoclassical models (Solow, 1956; Mankiw et al., 1992), popularised by Baumol, Barro and Sala-i-Martin (Baumol, 1986; Barro, & Sala-i-Martin, 1992, 2003; Barro, 2000; Sala-i-Martin, 1996a, 1996b, 2002).”

“Numerous studies empirically tested the Kuznets theory and determined the U shaped relation between income inequality and economic growth (Barro (2000); Gine & Townsend (2004)).”

“Большой вклад в исследование неравенства внесли работы: Barro, 2000; Kaldor, 1955—1956; Aghion et al., 1999.”

“It does not, however, imply that income equality has negative net effect on economic growth because there are other positive effects of equal income distribution on growth, as described by Barro (2000). The rest of the article is organized as follows.”

“For further details on the employment of lagged values of the explanatory variables as instruments, see Barro (2000).”

“Since then, many scholars have conducted empirical researches on the extent of the impact on sustainable economic growth from different institutional perspectives, including private property rights [13,14], market operation [15], inequality and social conflicts [16,17] and government efficiency and corruption [18].”

“Still other studies have found more nuanced relations between inequality and growth.5 Barro (2000), for example, found that higher inequality tends to retard growth in poor countries but promote growth in richer countries.”

“6 In particular, Forbes (2000) and Barro (2000) fundamentally challenge previous findings of a negative inequality-growth relationship. Note, however, that both Forbes (2000) and Barro (2000) use panel data and”

“Barro (2000) uses panel regressions for a broad sample of 100 countries to estimate the per capita gdp growth rate, using explanatory variables that include the rate of investment, the fertility rate, years of schooling, and the terms of trade.”

“In addition, Wells (2006) mentions numerous studies that support the positive relationship between education and income inequality, including Barro (2000).”

“On the same line, Grigoli and Roberts [2016] find pervasive evidence of nonlinearities and find in addition that “the slope of the relationship between inequality and economic development from positive turns negative at a net Gini of about 27 percent, indicating that the”

“In the political economy studies, high-income inequality may constrain growth (Alesina & Rodrik, 1994; Barro, 2000; Perotti, 1993).”

“The log (initial GDP) becomes negative and significant, which lends support to the idea of convergence asserting that per capita income of poorer countries will tend to grow faster than richer economies (Barro, 2000).”

“A second category of studies finds no effects at all or effects that are contrary to the HO-SS model predictions (Barro, 2000; Hanson &Harrison, 1999; Meschi &Vivarelli, 2009; Ravallion, 2001; Verhoogen, 2008).”

“Based on the long-term economic growth model [47], this paper adds urban investment explanatory variables to test the impact of urban investment on urban economic growth.”

“This result is in agreement, for example, with Barro (2000) and Ang (2010).28 In relation to the unemployment rate, although the literature is ambiguous about its effect,29 the coefficients in almost all models have statistical significance and have coherent sign supporting the idea that an…”

“For instance, Banerjee et al. (2008) define the middle class of developing countries as the group between the poor in these countries and the middle class in developed countries (e.g. the USA), setting the range of per capita income at $2–10 per day (splitting them further into three groups: $2–4, 4–6 and $6–10), and…”