Inequality and growth

Abstract

This dissertation provides a summary of the theoretical and empirical literature on the effects of income inequality on economic growth. We discuss the recent approaches that address this issue, though we focus on the models that belong in the Political Economy and the Imperfect Capital Markets Approach. We also study four different types of redistributive policies, as well as their implications. Finally,we review the recent empirical studies that examine the links between inequality and growth, and we present the results of two of them.