Introduction
Objective: Define the purpose of the dissertation, which is to explore the relationship between inequality and economic growth.
Scope: Outline the types of inequality (e.g., income, wealth) and the aspects of growth (short-term vs. long-term) considered in the literature.
Importance: Discuss why understanding this relationship is critical for policymakers and economists.
Literature Review
Theoretical Background: Introduce the foundational theories that link inequality with economic growth, distinguishing between perspectives that suggest positive, negative, inconclusive, or no relationships.
Review of Key Studies:
Negative Findings: Summarize research suggesting that inequality harms growth, highlighting studies such as Alesina and Rodrik (1994), Persson and Tabellini (1994), and others. Discuss the mechanisms proposed, such as political instability, underinvestment in education, and inefficient taxation and redistribution systems.
Positive Findings: Discuss studies indicating that inequality may promote growth, such as those by Li and Zou (1998) and Forbes (2000). Examine arguments around incentives for innovation and investment.
Inconclusive Findings: Highlight research that finds complex or context-dependent relationships, like the studies by Barro (2000) and Voitchovsky (2005).
No Relationship: Consider the perspectives suggesting that the relationship may be negligible or non-existent, such as Niyimbanira (2017).
Methodology
Data Sources: Describe the datasets used in the reviewed studies, noting any limitations or strengths specific to each dataset.
Analytical Techniques: Explain the various econometric models employed, such as regression analysis, panel data analysis, and time-series analysis.
Discussion
Critique of Existing Research:
Methodological Limitations: Critically assess the methodologies used in the studies, such as potential biases in data collection, issues with model specification, or endogeneity problems.
Contradictory Findings: Discuss why findings may differ, considering factors such as country-specific characteristics, time periods analyzed, and economic conditions.
Policy Implications: Reflect on how the findings of these studies influence policy recommendations regarding inequality and growth.
Conclusion
Summary of Findings: Recap the key insights drawn from the literature regarding how inequality impacts economic growth.
Future Research Directions: Suggest areas for further investigation, possibly recommending methodologies that could yield more definitive conclusions.
Final Thoughts: Conclude with a reflection on the importance of understanding the inequality-growth nexus for developing effective economic policies.
References
Detailed Citation: Include a comprehensive list of all studies reviewed, adhering to academic citation standards.
Negative findings
[9] A. Alesina, D Rodrik, Distributive politics and economic growth, Q. J. Econ. 109 (2) (1994) 465–490.
[50] T. Persson, G. Tabellini, Is inequality harmful for growth? theory and evidence, Am. Econ. Rev. 84 (3) (1994) 600–621.
[49] R. Perotti, Growth, income distribution and democracy: what the data say, J. Econ. Growth 1 (2) (1996) 149–187.
[46] U. Panizza, Income, inequality and economic growth: evidence from American data, J. Econ. Growth 7 (1) (2002) 25–41.
[36] S. Knowles, Inequality and economic growth: the empirical relationship reconsidered in the light of comparable data, J. Dev. Stud. 41 (1) (2005) 135–139.
[64] G. Wan, M. Lu, Z. Chen, The inequality–growth nexus in the short and long run: empirical evidence from China, J. Comp. Econ. 34 (4) (2006) 654–667.
[41] T. Malinen, Estimating the long-run relationship between income inequality and economic development. Discussion paper no. 634, University of Helsinki, Helsinki, 2008.
[23] F. Cingano, OECD social, employment and migration working papers no. 163, Trends in income inequality and its impact on economic growth, OECD, 2014.
[35] B.N. Iyke, S.Y. Ho, Income inequality and growth: new insights from Italy, Econ. Internazionale/Int. Econ. 70 (4) (2017) 419–442.
[18] M. Braun, F. Parro, P. Valenzuela, Does finance alter the relation between inequality and growth? Econ. Inq. 57 (1) (2019) 410–428.
[55] V. Royuela, P. Veneri, R. Ramos, The short-run relationship between inequality and growth: evidence from OECD regions during the Great Recession, Reg. Stud. 53 (4) (2019) 574–586.
[19] R. Breunig, O. Majeed, Inequality, poverty, and growth, Int. Econ. 161 (C) (2020) 83–99.
Positive findings
[47] M. Partridge, Is inequality harmful for growth? comment, Am. Econ. Rev. 87 (5) (1997) 1019–1032.
[39] H. Li, H. Zou, Income inequality is not harmful for growth: theory and evidence, Rev. Dev. Econ. 2 (3) (1998) 318–334.
[28] K. Forbes, A reassessment of the relationship between inequality and growth, Am. Econ. Rev. 90 (4) (2000) 869–887.
[52] L.A. Rangel, J. Andrade, J.A. Divin, Economic Growth and Income Inequality in Brazil: Analysing the Comparable Minimum Areas. Working Paper, Brazilian Institute for Applied Economic Research and University of Brasilia, Brazil, 2002.
[16] H. Bhorat, C. Van der Westhuizen, Economic growth, poverty and inequality in South Africa: the first decade of democracy, Dev.t Policy Res. Unit Confer. (2008) 27–29.
[58] M. Shahbaz, Income inequality, economic growth and nonlinearity: a case of Pakistan, Int. J. Soc. Econ. 37 (8) (2010) 613–636.
[40] M.T. Majeed, Economic growth and income inequality nexus: an empirical analysis for Pakistan, Kashmir Econ. Rev. 25 (1) (2016) 1–12.
[57] N. Scholl, S. Klasen, Re-estimating the relationship between inequality and growth, Oxf. Econ. Pap. 71 (4) (2019) 824–847.
Inconclusive findings
[25] K. Deininger, L. Squire, New ways of looking at old issues: inequality and growth, J. Dev. Econ. 57 (2) (1998) 259–287.
[13] R.J. Barro, Inequality and growth in a panel of countries, J. Econ. Growth 5 (1) (2000) 5–32.
[63] S. Voitchovsky, Does the profile of income inequality matter for economic growth? distinguish between the effects of inequality in different parts of the income distribution, J. Econ. Growth 10 (3) (2005) 273–296.
[21] A. Castelló-Climent, Inequality and growth in advanced economies: an empirical investigation, J. Econ. Inequal. 8 (3) (2010) 293–321.
[27] F. Fawaz, M. Rahnama, V.J. Valcarcel, A refinement of the relationship between economic growth and income inequality, Appl. Econ. 46 (27) (2014) 3351–3361.
[32] D. Halter, M. Oechslin, J. Zweimüller, Inequality and growth: The neglected time dimension, J. Econ. Growth 19 (1) (2014) 81–104.
[45] Ostry J.D., Berg, A. and Tsangarides, C.G. (2014). Redistribution, inequality, and growth. IMF staff discussion note.
[20] M. Brueckner, D Lederman, Inequality and economic growth: the role of initial income, J. Econ. Growth 23 (3) (2018) 341–366.
No relationship
[44] F. Niyimbanira, Analysis of the impact of economic growth on income inequality and poverty in South Africa: the case of Mpumalanga province, Int. J. Econ. Financ. Issues 7 (4) (2017) 254–261.
[15] N. Benos, S. Karagiannis, Inequality and growth in the united states: Why physical and human capital matter, Econ. Inq. 56 (1) (2018) 572–619.
