Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107563
Authors: 
Henderson, Daniel J.
Qian, Junhui
Wang, Le
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8771
Abstract: 
We examine the (potentially nonlinear) relationship between inequality and growth using a method which does not require an a priori assumption on the underlying functional form. This approach reveals a plateau completely missed by commonly used (nonlinear) parametric approaches - the economy first expands rapidly with a large decline in inequality, plateaus when inequality remains relatively stable, and then decreases rapidly with a large increase in inequality. This novel finding helps reconcile the conflicting results in the literature (using different parametric assumptions and datasets) and has important policy implications.
Subjects: 
panel data
growth
inequality
semiparametric
JEL: 
C5
C14
O4
Document Type: 
Working Paper

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