Links Between Growth, Inequality, and Poverty: A Survey
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Summary:
Is there a tradeoff between raising growth and reducing inequality and poverty? This paper reviews the theoretical and empirical literature on the complex links between growth, inequality, and poverty, with causation going in both directions. The evidence suggests that growth can be effective in reducing poverty, but its impact on inequality is ambiguous and depends on the underlying sources of growth. The impact of poverty and inequality on growth is likewise ambiguous, as several channels mediate the relationship. But most plausible mechanisms suggest that poverty and inequality reduce growth, at least in the long run. Policies play a role in shaping these relationships and those designed to improve equality of opportunity can simultaneously improve inclusiveness and growth.
Series:
Working Paper No. 2021/068
Subject:
Economic sectors Financial crises Income Income distribution Income inequality National accounts Poverty Poverty reduction
Frequency:
regular
English
Publication Date:
March 12, 2021
ISBN/ISSN:
9781513572666/1018-5941
Stock No:
WPIEA2021068
Pages:
54
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