| Popis: |
This paper explores the connection between inequality and economic growth. First, it designs an endogenous theoretical model of economic growth that predicts a quadratic relationship between the degree of inequality and the growth rate of the economy. In addition, we test the theoretical model empirically employing a panel data encompassed by a representative sample of Latin-American economies from 1975 to 1995. Our results support the existence of a quadratic relationship between the income inequality (proxied by the Gini index) and the rate of growth of the economies. Moreover, the empirical evidence underlies the necessity of an important investment in infrastructure in less developed countries, absolutely essential to obtain the "social capacity" (Abramovitz, 1986) necessary to foster the growth rate of income. |
