Inequality and Growth: Reviewing the economic and social impacts – The Australian Economic Review

Tony Ward’s review of the international literature on the links between inequality and economic growth has just been published: 


Does rising inequality provide incentives for individuals to work harder and invest? Or does it hamper economic growth? This article reviews the now-extensive literature on the subject. It starts by outlining some of the social impacts of recent increases in inequality, concentrating on those affecting economic growth. It then notes the diverse results from econometric studies. From these results, the article focuses on the mechanisms suggested in the literature linking inequality and economic growth. It summarises results in five broad areas. While specifics vary with circumstances, in most, increases in inequality have negative impacts on economic growth.

SOURCE: Ward, Tony*. “Inequality and Growth: Reviewing the economic and social impacts.” The Australian Economic Review, Volume 50, Issue 1, Pages 32–51

ALL USERS – see this LINK to publisher’s website [Open access @ 2 March 2017]

*Tony Ward is an Honorary Fellow at the University of Melbourne, and a member of a Brotherhood of St Laurence reading group.  He concludes that greater inequality generally hampers growth & points to another finding that there is no evidence that countries with higher levels of inequality either save or invest more.

BroCAP is produced by the two librarians at the Brotherhood of St Laurence in Melbourne, Australia.


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