Asset Distribution, Inequality, and Growth

With the recent resurgence of interest in equity, inequality, and growth, the possibility of a negative relationship between inequality and economic growth, has received renewed interest in the literature. Faced with the prospect that high levels o...

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Bibliographic Details
Main Authors:	Deininger, Klaus, Olinto, Pedro
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	AGGREGATE GROWTH AGRICULTURE ANNUAL GROWTH ANNUAL GROWTH RATE ANTI-EXPORT BIAS ASSET DISTRIBUTION ASSET INEQUALITY ASSETS CAPITAL ACCUMULATION CAPITAL MARKET CAPITAL MARKETS COLLEGE EDUCATION CONDITIONAL CONVERGENCE CONSUMPTION GROWTH COUNTRY CHARACTERISTICS COUNTRY LEVEL COUNTRY REGRESSIONS COUNTRY SPECIFIC CREDIT CONSTRAINTS CREDIT MARKET CREDIT MARKET IMPERFECTIONS CREDIT RATIONING CRIME CRISES CROSS-COUNTRY COMPARISONS CROSS-COUNTRY PERSPECTIVE DATA ISSUES DATA SET DEREGULATION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPED ECONOMIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING COUNTRY CONTEXT DEVELOPMENT RESEARCH DIFFERENTIAL IMPACT DISTRIBUTION OF WEALTH DISTRIBUTIONAL DATA DISTRIBUTIONAL IMPLICATIONS DYNAMIC PANEL ECONOMETRIC ESTIMATES ECONOMIC EFFICIENCY ECONOMIC EXCHANGE ECONOMIC GROWTH ECONOMIC OPPORTUNITIES ECONOMIC OUTCOMES ECONOMIC POLICY ECONOMIC PROCESS EDUCATIONAL ATTAINMENT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL REGULARITY EMPIRICAL RELATIONSHIP EMPIRICAL STUDIES EMPIRICAL SUPPORT EQUAL DISTRIBUTION EQUILIBRIUM ERROR TERM ETHNIC HOMOGENEITY EXOGENOUS SHOCKS EXPENDITURES EXPLANATORY VARIABLES EXTERNALITY FACTOR ENDOWMENTS FINANCIAL MARKETS FIXED EFFECTS FIXED EFFECTS ESTIMATOR GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROWTH EQUATION GROWTH EQUATIONS GROWTH IMPACT GROWTH LITERATURE GROWTH MODELS GROWTH RATES GROWTH REGRESSIONS GROWTH SPELLS HIGH CORRELATION HIGH INEQUALITY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT OF INEQUALITY IMPERFECT INFORMATION INCOME INCOME DISTRIBUTION INCOME DISTRIBUTION DATA INCOME INEQUALITY INCOME LEVELS INCOME REDISTRIBUTION INCOMPLETE MARKETS INDUSTRIALIZED COUNTRIES INEQUALITY INEQUALITY INDICATORS INEQUALITY MEASURES INEQUALITY-GROWTH RELATIONSHIP INSTITUTIONAL QUALITY INSURANCE INTERGENERATIONAL MOBILITY LAND INEQUALITY LAND OWNERSHIP LINK BETWEEN INEQUALITY AND GROWTH LONG-TERM GROWTH MACROECONOMIC POLICIES MARKET IMPERFECTIONS MEDIAN VOTER MINIMUM LEVEL MULTIPLE EQUILIBRIA NATIONAL ACCOUNTS NATIONAL LEVEL NEGATIVE EFFECT NEGATIVE IMPACT NEGATIVE RELATIONSHIP NEGATIVE SIGN NET EFFECT PER CAPITA INCOME POINT ESTIMATE POLICY DISCUSSION POLICY IMPLICATIONS POLICY LEVEL POLICY MAKERS POLICY MEASURES POLICY RESEARCH POLITICAL ECONOMY POLITICAL ECONOMY MODELS POOR COUNTRIES POSITIVE COEFFICIENT POSITIVE EFFECT POVERTY TRAPS PRIVATE INFORMATION PROMOTING GROWTH PROPERTY RIGHTS PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR RANDOM EFFECTS REAL GDP REDISTRIBUTIVE MEASURES REDUCED FORM EQUATION REGULATORY FRAMEWORK RESOURCE USE RURAL AREAS SAFETY NETS SCARCITY VALUE SECONDARY ENROLLMENT SECURE PROPERTY RIGHTS SERIAL CORRELATION SIGNIFICANT DIFFERENCES SIGNIFICANT IMPACT SIGNIFICANT RELATIONSHIP SOCIAL CAPITAL STANDARD DEVIATION TAX REVENUE TAXATION THEORETICAL MODELS UNEQUAL DISTRIBUTION VULNERABLE GROUPS WAGES WEALTH WEALTH DISTRIBUTION
Online Access:	http://documents.worldbank.org/curated/en/2000/06/437086/asset-distribution-inequality-growth http://hdl.handle.net/10986/19830

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Summary:	With the recent resurgence of interest in equity, inequality, and growth, the possibility of a negative relationship between inequality and economic growth, has received renewed interest in the literature. Faced with the prospect that high levels of inequality may persist, and give rise to poverty traps, policymakers are paying more attention to the distributional implications of macroeconomic policies. Because high levels of inequality may hurt overall growth, policymakers are exploring measures to promote growth and equity at the same time. How the consequences of inequality are analyzed, along with the possible cures, depends partly on how inequality is measured. The authors use assets (land) rather than income - and a GMM estimator - to examine the robustness of the relationship between inequality and growth that has been observed in the cross-sectional literature, but has been drawn into question by recent studies using panel techniques. They find evidence that asset inequality - but not income inequality - has a relatively large negative impact on growth. They also find that a highly unequal distribution of assets reduces the effectiveness of educational interventions. This means that policymakers should be more concerned about households' access to assets, and to the opportunities associated with them, than about the distribution of income. Long-term growth might be improved by measures to prevent large jumps in asset inequality - possibly irreversible asset loss because of exogenous shocks - and by policies to facilitate asset accumulation by the poor.

Asset Distribution, Inequality, and Growth

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