Income inequality and economic growth: New evidence from Latin America

Fernando Delbianco, Carlos Dabús () and M. Angeles Caraballo

Revista Cuadernos de Economia, 2014

Abstract: This paper explores the relationship between the inequality of income distribution and the economic growth of 20 Latin American and Caribbean countries during the 1980-2010 period. The study shows that the features of this relationship depend on the income level. In general, inequality is harmful to economic growth. However, when it comes to the upper tail of the richer countries’ income distribution, higher inequality encourages economic growth and the relation becomes positive. Thus, contrary to the economic policy recommendations for the richer countries, our evidence suggests that progressive redistributive policies in favor of poorer layers of population promote economic growth in lower income economies. ***** En este artículo se estudia la relación entre la desigualdad del ingreso y el crecimiento para veinte economías de América Latina y el Caribe, para el período 1980-2010. Los resultados muestran que la relación entre desigualdad e ingreso depende fuertemente del nivel de ingreso que un país presente. En general, la desigualdad afecta de manera negativa al crecimiento. En cambio, para los países más ricos, mayor desigualdad determina mayor crecimiento. Por ende, las recomendaciones de política que surgen de los resultados de este artículo serían aquellas con objetivo de reforzar las políticas redistributivas progresivas en los países de menor ingreso

Keywords: Income inequality; economic growth; level of development; developing economies; Latin America (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.fce.unal.edu.co/media/files/documentos/Cuadernos/63/v33n63a04.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000093:012109

Access Statistics for this article

More articles in Revista Cuadernos de Economia from Universidad Nacional de Colombia, FCE, CID Contact information at EDIRC.
Bibliographic data for series maintained by Facultad de Ciencias Economicas Unal ().