Economic Growth and Income Inequality: Reexamining the Links - Finance & Development - March 1997 - Klaus Deininger and Lyn Squire

CONOMISTS have long sought to understand the links between economic growth and income distribution. The main issues, listed below, have important policy implications for developing countries: • In countries with low levels of development, does economic growth result in a more unequal distribution of income, and is it necessary for per capita income to reach a certain minimum level before income inequality begins to decrease? • Do countries with unequal income distributions experience slower economic growth than more egalitarian countries? • Should governments consider adopting redistributive policies to improve the situation of the poor?