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INEQUALITY AND GROWTH: FROM MICRO THEORY TO MACRO EMPIRICS
Author(s) -
Gobbin Niko,
Rayp Glenn,
Van de gaer Dirk
Publication year - 2007
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.2007.00427.x
Subject(s) - economics , inequality , macro , index (typography) , economic inequality , econometrics , growth theory , set (abstract data type) , measure (data warehouse) , order (exchange) , neoclassical economics , mathematics , computer science , mathematical analysis , finance , database , world wide web , programming language
We show that the way individual income data should be aggregated into an index of inequality in order to explain countries' growth performance is theory specific. A simulation set‐up shows that the use of a wrong measure might obscure the inequality–growth relationship and that the relative performance of different measures of inequality can be informative about the channel through which inequality influences economic growth.