Understanding the relationship between poverty, inequality and growth: a review of existing evidence

Abigail McKnight

CASE Papers from Centre for Analysis of Social Exclusion, LSE

Abstract: This paper reviews the theoretical literature and empirical evidence on the relationship between poverty, inequality and economic growth. It finds evidence that economic inequality is good for growth as well as new convincing evidence that inequality is bad for growth. Variation in data quality, methodologies, the range of countries included in different studies makes it difficult to compare the evidence. A recent hypothesis that the relationship between inequality and growth might be non-linear, with very low and very high levels of inequality being harmful to growth but a range in between where the relationship is not clearly defined might provide a means to unify some of the conflicting findings.

Keywords: Poverty; inequality; growth (search for similar items in EconPapers)
JEL-codes: D31 I32 O47 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-hpe and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:cep:sticas:/216

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