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Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this paper is to reexamine Milton Friedman and Anna J. Schwartz's argument regarding major business cycle movements, limiting the analysis to business cycle peaks and excluding troughs. Friedman-Schwartz argued that appreciable changes in the rate of growth of the stock of money are a necessary and sufficient condition for appreciable changes in the rate of growth of money income. The necessity and sufficiency of a monetary deceleration for a business cycle peak are explored using a definition of monetary deceleration that takes account of both the size and duration of a change in the growth rate of money.

This paper introduces a model in which greater inequality reduces growth in economies with low levels of financial development but that this effect is attenuated in economies with more developed systems. The model also predicts that individuals in economies with developed financial markets have a higher tolerance to inequality. Using a panel dataset that covers a large number of countries, this paper shows empirical evidence that is consistent with the main predictions of the model. Overall, this paper's major findings highlight that some of the pernicious effects of inequality can be attenuated by improving access to credit. [ABSTRACT FROM AUTHOR]

One potential consequence of rising top‐income concentration is borrowing by less‐affluent households attempting to maintain relative living standards. This paper evaluates the “keeping up with the Joneses” phenomenon, examining the responsiveness of payment‐to‐income ratios for different debt types across the income distribution to changes in income among affluent households. The analysis provides evidence for the responsiveness of debt to rising top incomes. Middle‐ and upper‐middle‐income households take on more housing‐related debt and have higher payments in places with higher top‐income levels. Among lower‐income households non‐mortgage borrowing and debt payments decline, consistent with restrictions in the supply of credit. (JEL D63, D14) [ABSTRACT FROM AUTHOR]

This paper introduces a new comprehensive panel of annual state-level income inequality measures spanning the postwar period 1945–2004. For many states, the share of income held by the top decile experienced a prolonged period of stability after World War II, followed by a substantial increase in inequality during the 1980s and 1990s. This paper also presents an examination of the long-run relationship between income inequality and economic growth. Our findings indicate that the long-run relationship between inequality and growth is positive in nature and driven principally by the concentration of income in the upper end of the income distribution. ( JEL D31, O40) [ABSTRACT FROM AUTHOR]

The objective of the paper is to verify if income inequality impedes the growth rates in OECD countries in the period of 1990–2014 and to reveal whether the choice of the income inequality measure determines the sign and the strength of the estimated relationship. We use system GMM to estimate parameters of a dynamic panel growth model. The research indicates that income inequality negatively affects economic growth. We also find evidence that various measures of inequality bring the different scale of consequences for economic growth, with measures that give more weight to the middle part of the distribution being the weakest predictor of GDP growth. Simultaneously, we present the test of weak instruments, which helps to explain these differences. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Do institutions rule when explaining cross-country divergence? By employing regression tree analysis to uncover the existence and nature of multiple development clubs and growth regimes, this paper finds that to a large extent they do. However, the role of ethnic fractionalization cannot be dismissed. The findings suggest that sufficiently high-quality institutions may be necessary for the negative impact on development from high levels of ethnic fractionalization to be mitigated. Interestingly, I find no role for geographic factors-neither those associated with climate nor physical isolation-in explaining divergence. There is also no evidence to suggest a role for religious fractionalization. Copyright © 2009 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper shows that, based on Yang and Zhang's (2003) analysis, economic development can be viewed as an evolutionary process of division of labour that is driven by improvements in transaction efficiency. Both economic development and income inequality are consequences of this process; there is no systematic relationship between the two. Implications of the Yang-Zhang analysis for government policies, including the allocation of foreign aid, are also discussed. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Population & Development Review is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Much of the change in individual earnings has occurred at the top. This paper provides new evidence about the earnings distribution in the UK. The evidence is new in that it provides detail about what has happened within the top 10%, covering groups such as the top 1% and the top 0.5%. The aim is to set the recent rise in top earnings in historical perspective, and to make international comparisons. The evidence is new in that it covers the whole of the postwar period, allowing a contrast to be drawn with the 'golden age' of the 1950s. [ABSTRACT FROM AUTHOR]

This study attempts to reassess the relationship between economic growth and inequality using an up to date data set, 2003-2007, for a sample of seventy-four developed and developing countries. Average economic growth during this studied period is regressed against the 2003 values of inequality, growth, education, human development, inflation and governance quality using OLS cross-country models. The findings support a negative impact of inequality on economic growth for the entire sample. In particular, an increase (decrease) in inequality would lead to greater deterioration (expansion) in economic development in low-income countries than in high- and middle-income countries. Furthermore, improvement in governance does not either stimulate or hinder the economic growth. [ABSTRACT FROM AUTHOR]

We build an overlapping generations model to analyse the evolution of inequality as an economy develops. Our model economy resembles a 'very capitalist society'. Initially, wealth is exclusively concentrated in a rich dynasty. We ask whether or not this type of capitalist economy contains a fundamental contradiction, as claimed by Piketty in his recent book. We derive a condition under which the economy is driven to a state of perpetual inequality. However, we also show that an economy where capital deepening triggers the development process is very unlikely to be absorbed in that state. [ABSTRACT FROM AUTHOR]

ABSTRACT. This paper analyzes the relationship between income inequality and economic growth within the United States using state level data. It describes income inequality in the U.S. since 1960, then employs a two-step causal model to test the institutionalist contention that income inequality leads to socio-political instability, which has a negative impact on economic progress. The empirical results offer support for the institutionalist view. [ABSTRACT FROM AUTHOR]

The article presents abstracts of papers published in the current issue of the periodical "Population and Development Review." The article " Technological Advance, Economic Growth, and the Distribution of Income," Wassily Leontief discusses changed brought about in income distribution by technological advance and economic growth in Western Europe. The article "A Century of Demographic and Cultural Change in Western Europe: An Exploration of Underlying Dimensions," by Ron Lesthaeghe focuses on recent developments in patterns of family life in Western Europe. The article "Children's Work Activities in Malaysia," by Dennis De Tray explores economic contributions that Malaysian children make to their parents while living in the parents' households. The article "On the Institutional Analysis of Population Programs," by Ruth Simmons, Gayl D. Ness, and George B. Simmons discusses the treatment of population programs in the dominant social-demographic research tradition and in the alternative tradition that derives from public administration, organization behavior, and management sciences, showing the advances and limitations of both orientations.

Political institutions are an essential component to explain income variation. Brazilian municipalities are characterized by a great contrast in the colonization process and its impacts on the current income level and distribution, and other development aspects. This study analyzes the spatial heterogeneity of the relationship between institutional quality and the municipalities' economic development. We use a spatial moving window method applied to weighted regressions—Geographically Weighted Regression (GWR). We find evidence that good institutions increase income and other variables related to economic development. In addition, the institutional quality influence on economic development measures is distinct across the Brazilian regions. [ABSTRACT FROM AUTHOR]

. This article uses social accounting matrices in a Leontief multiplier model to estimate the effects of trade expansion on employment and incomes in India and South Africa. The evaluation focuses on a period of rapid trade liberalization beginning in the early 1990s, distinguishing between trade with developed and developing countries. Employment results identify winning and losing industries and examine sex and skill biases. Income results examine inequality measured by household income distribution (rural and urban). Results are presented in the context of trade theory as regards adjustment mechanisms for bringing trade into balance and implications of specialization for economic development. [ABSTRACT FROM AUTHOR]

Cities regularly face a wide range of economic development choices that inevitably create both winners and losers within their communities. Proper assessment of the impacts of such choices requires not only an appropriate modelling framework but also explicit understanding and incorporation of a city's income distribution priorities. This paper proposes that a computable general equilibrium (CGE) model, which includes a structured social welfare function, can provide precisely such a tool to fully evaluate economic development choices, tradeoffs and implications. We leverage such a model for a small Colorado city and simulate sector-specific expansionary economic development policies. We apply the framework to understand the gains and losses of two distinct groups, namely original residents versus new arrivals, likely to be affected by such choices, alongside the welfare impacts to the city as whole. Resumen. Las ciudades se enfrentan regularmente a un amplio abanico de decisiones en cuanto al desarrollo económico, que a la vez crean inevitablemente ganadores y perdedores dentro de sus comunidades. Una evaluación adecuada de los impactos de tales decisiones requiere no solamente un marco de modelización apropiado sino también el entender y responsabilizarse explícitamente de las prioridades en cuanto a la distribución de ingresos de una ciudad. Este artículo propone que un modelo de equilibrio general computable (CGE), que incluya una función de asistencia social estructurada, puede precisamente proporcionar dicha herramienta para evaluar por completo las decisiones en cuanto al desarrollo económico, las ventajas relativas y las implicaciones. Empleamos dicho modelo para una pequeña ciudad del estado de Colorado y simulamos políticas de desarrollo económico expansionistas específicas para un sector. Aplicamos este marco de trabajo para entender las pérdidas y ganancias de dos grupos diferentes, como son los residentes originales y los recién llegados, quienes probablemente se verán afectados por tales decisiones, junto con los impactos en asistencia social para la totalidad de la ciudad. [ABSTRACT FROM AUTHOR]

Current growth literature does not explain the inability of poor countries to utilize existing knowledge. This study presents a stylized development model based on firms' expansion through on-the-job training. Since trained workers can supervise and train more workers, a development process in which output and productivity increase up to a full utilization of existing technology is generated. Unlike schooling-based models, which require an assumption regarding a smaller local stock of knowledge, this study relies on the size of the industrial sector and the limited supply of training opportunities, therefore highlights barriers to development, even when technology and capital are available. ( JEL O1, O4, J2) [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Numerous papers have searched for empirical linkages between long run economic growth and a myriad of economic, socio-political and environmental factors. Most of these studies use ordinary least-squares regression or panel regression analysis on a sample of countries and therefore consider the behaviour of growth around the mean of the conditional distribution. We extend the literature by using quantile regression to analyse long-term growth at a variety of points in the conditional distribution. By using this approach, we identify the determinants of growth for under performing countries relative to those for over achieving countries. [ABSTRACT FROM AUTHOR]

This article examines the evolving finance–inequality nexus during the process of economic transition. We estimate the varying marginal effects of financial depth on income inequality in every state of the transition process. Using China as an example of transition economies, we establish the causal effects of financial depth on urban income inequality and examine the estimation biases when the evolving relationship is not appropriately characterized. Along the transition process of the Chinese economy, we identify a robustly asymmetric and roughly inverted‐L shaped relationship between financial depth and urban inequality. We find that financial depth alone accounts for 11–28% of the overall variations of urban income inequality and the marginal impacts of financial depth change with the degree of credit constraint, the fraction of state ownership, and the level of economic development. [ABSTRACT FROM AUTHOR]

This article explores a family of partial welfare orderings of income distributions. The authors remark that as a country undergoes economic development, its mean income increases. If at the same time its income distribution becomes more equal, economists generally agree that welfare of that country has improved. They remark that it is a challenge to find a different partial ordering that is defined by a set of welfare functions with some generally acceptable properties, which can be empirically represented by the dominance relationship of some easily constructed curves, and which allows trade-offs between efficiency and equity. The authors use data on China's yearly income distributions to demonstrate welfare changes in that country during the period of its recent economic reform, according to the welfare orderings defined in this article. The main sources of data are the China Statistics Yearbooks and China Social Statistics. They refer to a recent paper for a more comprehensive discussion of the data source, the reliability of the data.

Current theories of economic development suggest a virtual plethora of hypotheses about particular economic and socioeconomic factors that affect the size distribution of income. However, existing empirical studies rely almost exclusively on cross-country data. Such studies necessarily imply a highly aggregated approach which may be singularly ill-suited to analyzing the determinants of changing income distribution during the process of development. Development does not impact evenly upon all regions of a country; rather, the historical rule seems to be the emergence of "poles of growth" within a country, where polarization effects outweigh spread effects.[1] Models of dual development, of course, are a standard device in development economics [4], yet their value is implicitly disregarded by empirical studies that fail to disaggregate data below the country level.
The purpose of this paper is to provide a more useful analysis of the influences of several structural elements on income inequalities in a less-developed country, Costa Rica. The level of regional aggregation in this study is very low, the distrito, a county-like political subdivision, of which 335 existed in Costa Rica in 1963. [ABSTRACT FROM AUTHOR]

Increases in educational level tend to increase income. Higher community income in turn can enable more resources to be put into education. However, increases in population tend to spread scarce educational resources over more children, thereby inhibiting the rise in level of living that can come through increasing the educational investment in each individual. This paper analyzes for a developing economy how changes in birth and death rates affect population growth and educational and economic development. A simulation model of these demographic, educational, and economic processes, based on empirical data from the Buganda tribe in Uganda, is used to study the extent and timing of the responses. Both the method and the empirical results should have relevance for readers concerned with growth and development. [ABSTRACT FROM AUTHOR]

The development process and the demographic changes that are a central element of it explain both the nearly two centuries of increasing income inequality prior to 2000 and the reversal of this trend that followed. There are at least four phases of the development process: (1) Malthusian pre‐development, (2) initial growth, (3) improved productivity, and (4) receding growth. Prior to the industrial revolution, the entire world was in the Malthusian Phase 1. During 1820–1950, about 20 countries, mostly in Western Europe, North America, and Oceania, moved out of Phase 1 and began to grow more rapidly. But, per capita income levels in the rest of the world continued to stagnate and worldwide income inequality widened continuously for at least 150 years following the Industrial Revolution. Around 1960, developing countries began to escape the Malthusian trap and move into Phase 2 of development. By the latter part of the 20th century, many developing countries were achieving growth rates equal to or greater than the high‐income countries, slowing the rise in inequality. By 2000–2015 most developing countries were in either Phases 2 or 3 of development, while most of the high‐income countries were moving into Phase 4, leading to a sharp reduction in worldwide income inequality. The recent reductions in worldwide income inequality are likely to continue in the near term because of the continuation of the more favorable demographic changes in developing compared to high‐income countries. [ABSTRACT FROM AUTHOR]

What is the relationship between the economy's long‐run growth rate, its capital‐income ratio, and its factor income distribution? A satisfactory answer requires an endogenous growth and savings rate. We scrutinize Piketty's (2014) theory in a richly parameterized variant of Romer's (1990) seminal model with and without population growth. The economy's growth and savings rate are exogenous in Piketty's theory and endogenous in Romer's. In contrast to Piketty's Second Fundamental Law of Capitalism a smaller growth rate may be associated with a smaller capital‐income ratio. Moreover, it may go together with a greater or a smaller capital share. [ABSTRACT FROM AUTHOR]

Knowledge of the determinants of self‐employment income is critical to entrepreneurial development strategies if the development goal is to increase incomes not just employment. Using American Community Survey data, unconditional quantile regression is used to investigate differences in the relationship between entrepreneurial income and an array of individual, industry, and regional characteristics across the self‐employment income distribution. Personal attributes, such as education, race, age, and gender, both explain differences in self‐employment income and vary in importance across the income distribution. Regional agglomerative effects are significantly positive and stronger at the upper end of the self‐employed income distribution. [ABSTRACT FROM AUTHOR]

Although they are leading institutions in the world of modern development finance, the multilateral development banks have not been very explicit in outlining the development theories upon which they base their loan operations. This paper assesses the utility of the three prime theories employed by these institutions: the project approach, the macroeconomic (gap theory) approach, and the social welfare (or income distribution) approach. It indicates the questions to which each approach addresses itself, and it indicates weaknesses and theoretical inadequacies of each as a primary or sole development tool. Only a balanced and careful use of all these sometimes contradictory approaches will permit the multilateral lending institutions to fulfill their multifaceted obligations. [ABSTRACT FROM AUTHOR]

We investigate the relationship between economic growth and top income inequality under the influence of human and physical capital accumulation, using an annual panel of U.S. state-level data. Our analysis is based upon the 'unified' framework offered by Galor and Moav (2004) while the empirics account for cross-section dependence, parameter heterogeneity, and endogeneity, in nonstationary series. We conclude that changes in inequality do not influence growth, neither in the short run nor in the long run in the United States as a whole in the 1929-2013 period. Our findings are robust to the inclusion of overall income inequality measures. These findings provide support for the theoretical prediction of the unified theory of inequality and growth, according to which the growth effect of inequality becomes insignificant in the latest stages of economic development that the United States experiences during our period of investigation. Therefore, future policies aiming at moderating the concentration at the upper end of income distribution are not likely to have adverse growth consequences in developed countries such as the United States. ( JEL I21, O47, C23) [ABSTRACT FROM AUTHOR]

This article studies the joint effect of political and economic inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it-with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, we find that inequality has a negative effect on both institutional quality and redistribution. [ABSTRACT FROM AUTHOR]

We estimate the causal link from income inequality to generalized trust by reconsidering the country-level evidence on this issue. First, we exploit the panel dimension of the data, thus controlling for any country unobservable time-invariant variables, and find a negative relationship between the two variables that holds only for developed countries. Second, we focus on these advanced economies and provide instrumental variable estimates using the predicted exposure to technological change as an exogenous driver of inequality. According to our findings, the negative causal effect of inequality on trust is even larger than that coming from ordinary least squares estimation. We also provide new insights on the effects of different dimensions of inequality, exploiting measures of both static inequality-such as the Gini index and top income shares-and dynamic inequality-proxied by intergenerational income mobility. ( JEL D31, O15, Z13) [ABSTRACT FROM AUTHOR]

Despite vibrant economic growth, the Philippines confronts persistently high income inequality. Using household-level panel data collected for the years 2003, 2006 and 2009, we investigate how income segmentation affects Filipinos' income mobility prospects. The results of the multinomial logistic models suggest that if households are grouped according to initial income (in 2003), richer households had the lowest propensity to experience slow to moderate income changes and were most likely to experience consistently downward mobility from 2003 to 2009, while initially poorer households had the highest propensity to experience consistently upward mobility. On the other hand, if households are grouped according to permanent income, we still find that lower income households experienced (slightly) better income mobility outcomes; however, their edge over higher income households was much smaller than when initial income was used. This result could indicate that convergence on the basis of initial income may be in part random variation. The findings are robust to heuristic and model-based methods of grouping households into different income segments. [ABSTRACT FROM AUTHOR]

In academic economics, inequality has received little attention in recent decades, although popular concerns about the super-rich have grown. The World Top Incomes Database provides evidence of the rise of the super-rich in many countries since 1980. Thomas Piketty has publicised the new data, predicting increases in inequality due to the return to capital exceeding the rate of economic growth and advocating policies to counter such increases by high taxes on the income and wealth of the super-rich. This article asks why inequality has been a neglected topic, assesses empirical contributions and Piketty' s model and discusses implications for evidence-based policies. [ABSTRACT FROM AUTHOR]

Recent observations suggest that as performance-related pay has been increasingly used, (i) compensation has grown with labour productivity, and (ii) there has been a rise in income inequality. This study is a theoretical attempt to provide a convincing explanation of these observations. We develop an endogenous growth framework comprising a profit/revenue-sharing scheme that simultaneously governs income inequality and economic growth. Therefore, we show that a share-based scheme can cause the workers to engage in performance pay seeking and, as a result, boost economic growth. Nonetheless, the intensive use of performance pay also results in higher income inequality. Because of the increased use of performance pay, there exists a positive relationship between economic growth and income inequality. While this result contradicts the traditional notion, it is supported by recent empirical studies. Our welfare analysis indicates that a more intensive sharing scheme does not necessarily raise the level of social welfare, even though it is favourable to economic growth. [ABSTRACT FROM AUTHOR]

We argue that financial market development contributed to the rise in the skill premium and residual wage inequality in the United States since the 1980s. We present an endogenous growth model with imperfect credit markets and establish how improving the efficiency of these markets affects modes of production, innovation, and wage dispersion between skilled and unskilled workers. The experience of U.S. states following banking deregulation provides empirical support for our hypothesis. We find that wages of skilled workers increased by between 0.5% and 6.3% following deregulation while those of unskilled workers fell by between 3.5% and 8.7%. Similarly, residual (or within-group) inequality increased; the 90-50 percentile ratio of residuals from a Mincerian wage regression and their standard deviation increased by 4.2% and 1.7%, respectively. [ABSTRACT FROM AUTHOR]

This article reviews the economy-wide effects of the Work Choices and Fair Work reforms to Australia's industrial relations system. Outcomes examined are wages growth and earnings inequality, labour market adjustment, labour productivity growth and industrial disputes. Little evidence is found of an effect from the industrial relations reforms made in the 2000s. I argue that this is consistent with the nature of the reforms, being primarily oriented to distributive rather than efficiency goals. I finish by describing how private interest can explain current lobbying for further reform to Australia's industrial relations system. [ABSTRACT FROM AUTHOR]

The stylized facts that motivate this article include the diversity in growth patterns that are observed across countries during the process of economic development and the divergence over time in income distributions both within and across countries. We construct a dynamic general equilibrium model in which technology adoption is costly and agents are heterogeneous in their initial holdings of resources. We interpret the adoption cost as the resources expended in acquiring skills associated with new technologies. Endogenous growth occurs in our model largely as a result of human capital deepening. The analytical results of the model characterize three growth outcomes associated with the technology adoption process depending on productivity differences between the technologies. These outcomes are labeled 'poverty trap,' 'dual economy,' and 'balanced growth.' The model is then capable of explaining the observed diversity in growth patterns in addition to the divergence of incomes over time and across countries. [ABSTRACT FROM AUTHOR]

. After 'opening up' in 1978, China followed a development strategy that has led to internal and external economic imbalances, especially since its labour market reform of the mid-1990s and the resulting surge in rural-to-urban migration. Low labour costs emerged as its main comparative advantage, but its over-reliance on exports for growth was starkly exposed by the global economic crisis of 2008. This, coupled with widening income disparities, could jeopardize the sustainability of China's growth unless it adjusts its reform and development strategies to promote income equality and domestic consumption. The Employment Contract Law in force since 2008 could signal institutional change in the right direction. [ABSTRACT FROM AUTHOR]

The present study examines the extent to which income distribution affects the ability of economic growth to reduce poverty, based on 1990s data for a sample of rural and urban sectors of African economies. Using the basic-needs approach, an analysis-of-covariance model is derived and estimated, with the headcount, gap, and squared gap poverty ratios serving as the respective dependent variables, and the Gini coefficient and PPP-adjusted incomes as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, albeit at varying rates for the three poverty measures: lowest for the headcount, followed by the gap and fastest for the squared gap. The ranges for the income elasticity in the sample are estimated at: 0.02–0.68, 0.11–1.05, and 0.10–1.35, respectively, for these poverty measures. Furthermore while, on average, the responsiveness of poverty to income growth appears to be the same between the rural and urban sectors, there are substantial sectoral differences across countries. The results suggest the need for country-specific emphases on growth relative to inequality. [ABSTRACT FROM AUTHOR]

Elasticities are estimated for long-run solutions of Markov chains of income distribution for the European regions. The results indicate that there will be no major changes in these long-run solutions for lower income states in the Markov chain and that effects on higher income states will be only moderate. [ABSTRACT FROM AUTHOR]

We develop an endogenous growth model with elastic labor supply, in which agents differ in their initial endowments of physical capital. In this context, the growth rate and the distribution of income are jointly determined. We then examine the distributional impact of different ways of financing an investment subsidy. Policies aimed at increasing the growth rate result in a more unequal distribution of pre-tax income, consistent with the positive correlation between income inequality and growth observed in the recent empirical literature. However, there is no conflict between efficiency and equity if inequality is measured in terms of the distribution of welfare. [ABSTRACT FROM AUTHOR]

This article has two goals: (i) to reduce the 7-fold productivity differential required to explain the observed 33-fold income difference between the richest and poorest countries of the world; and (ii) to explain cross-country differences in the capital-output ratio. To achieve the first goal we modify the production function of the standard neoclassical growth model to include public capital whose provision is subject to intermediation costs. For the second goal we distort private investment by introducing credit frictions. The model, quantified using cross-country data, generates an income gap of 33 with productivity differences of only 3 under the measured variations in public and private capital. The required productivity gap declines even further, to 2.1, when we introduce a home-production sector. On the second goal, however, credit frictions do a poor job of explaining cross-country variations in the capital-output ratio. [ABSTRACT FROM AUTHOR]

This article examines China's socioeconomic transformation towards health and mortality that began during the late 1970s. These socioeconomic transformations have led to great economic growth, and living standards even in the poorest parts of China have improved over a twenty-five year time span. A survey was conducted by the author to gauge the scope and breadth of those economic reforms, and the study found that while living standards have improved greatly in China, an inequality of income distribution has emerged as well.

A multiregional Computable General Equilibrium (CGE) model of Korea is used to assess urban development strategy in terms of national economic growth and income distribution. We find that the dispersion of total investment expenditure to six large cities would be the best policy if the emphasis of national development were to be placed on economic growth, together with a reduction in regional income disparity. Conversely, a heavy concentration of investment expenditure in Seoul and Pusan would lead to an amelioration of inequality in the distribution of personal income, but it would be difficult to implement due to hostility towards a primarily city-oriented value system. [ABSTRACT FROM AUTHOR]