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Jahrestagung des Vereins für Socialpolitik 2010 (Kiel): Ökonomie der Familie >
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http://hdl.handle.net/10419/37461
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| Title: | | Inequality and Growth: The Neglected Time Dimension  |
| Authors: | | Oechslin, Manuel Halter, Daniel Zweimüller, Josef |
| Issue Date: | | 2010 |
| Series/Report no.: | | Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Empirical Studies of Inequality E4-V3 |
| Abstract: | | When it comes to the inequality-growth relationship, the empirical literature offers contradictory assessments: Estimators based on time-series variation only (i.e., differences-based estimators) indicate a strong positive link while estimators also exploiting the cross-sectional variation (i.e., level-based estimators) suggest a negative relationship. Taking advantage of a new dataset, the present paper confirms this conflicting pattern - but also offers an explanation on the basis of a simple model: The seemingly inconsistent empirical results just mirror different aspects of reality. More specifically, we argue that the differences-based methods are prone to reflect the (mostly) positive short- or medium-run implications of inequality while the level-based estimators also incorporate the negative consequences - which require more time to materialize. Thus, the latter estimates come close to reflect the adverse overall impact of inequality in the long run. |
| Subjects: | | Inequality growth medium-run effects long-run effects |
| JEL: | | O11 O15 C23 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Jahrestagung des Vereins für Socialpolitik 2010 (Kiel): Ökonomie der Familie
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