is economic growth good for the poor tracking low incomes using general means in this paper we propose the use of an alternative methodology to track low incomes based on atkinson s 1970 family of equally distributed equivalent income functions which are called general means here we provide a new characterization of general means that justifies their use in this context our method of evaluating the effects of growth on poor incomes is based on a comparison of growth rates for two standards of living the ordinary mean and a bottom sensitive general mean the motivating question is to what extent is growth in the ordinary mean accompanied by growth in the general mean a key indicator in this approach is the growth elasticity of the general mean or the percentage change in the general mean over the percentage change in the usual mean our empirical analysis estimates this growth elasticity for a data set containing 144 household surveys from 20 countries over the last quarter century among other results we find that the growth elasticity of bottom sensitive general means is positive but significantly smaller than one this suggests that the incomes of the poor do not grow one for one with increases in average income

poverty under the kuznets process the object of this paper is to investigate the behaviour of poverty indices during the course of development since development is a complex process one cannot hope to capture in a single model all its different facets thus for example the famous lewis 1954 model although it highlights the role of surplus labour in fixing the supply price of labour to the industrial sector assumes identical real incomes for workers in the rural and urban sectors so that it is not rich enough to provide a vehicle for analysing inequality or poverty an alternative model which also focuses on the transfer of population from the rural to the urban sector in the course of development but nevertheless permits the analysis of distributional change is that due to kuznets 1955 in the simplest version of the kuznets process the population is seen as composed of two distributions a high mean income but high inequality distribution in the urban sector and a low mean income and low inequality distribution in the rural sector and the process of development is characterised as an increase in the population share of the urban sector it is from the workings of such a process that kuznets 1955 hypothesised his famous inverse u relation between inequality and development which we have analysed elsewhere anand and kanbur 1981a our object here is to extend this analysis to an investigation of poverty under the kuznets process while the kuznets model permits an analysis of distributional change it suffers from the drawback that it does not contain an adequate explanation of how and why the population shift takes place we will take up this point later on in this paper where a model of migration is presented which does indeed rationalise the kuznets process section i sets up the kuznets process formally and analyses the behaviour of two classes of poverty indices section ii traces the poverty implications of the todaro 1969 model of migration and arrives at conclusions somewhat different from those of fields 1979 section iii winds up the paper

development of financial intermediation and the dynamics of urban rural disparity in china 1978 1998 chen y p liu m and zhang q development of financial intermediation and the dynamics of urban rural disparity in china 1978 1998 regional studies this paper focuses on the impacts of financial intermediation development on the urban rural income disparity urid in china using a twenty year province level panel data set from 1978 to 1998 it is found that the change of urid may be explained by fiscal policy during the early reform period 1978 1989 and financial intermediates during the later reform period 1990 1998 in addition it is shown that the direction the kuznets effect an inverted u shaped relationship between per capita gross domestic product and urid is sensitive to changes in government development policies this study adds to the spatial economic inequality literature by clarifying the effects of urban biased financial intermediation policy on the underlying dynamics of convergent and divergent effects on urban rural inequality chen y p liu m et zhang q le developpement

trade policy and income inequality new evidence abstract this paper uses recently available data to investigate the link between income inequality and trade protection it finds that among less developed countries more open economies experienced increased income inequality during the late 1980s trade policy has had no effect on income inequality in developed countries

growth and poverty reduction in ethiopia evidence from household panel surveys abstract the paper investigates the impact of growth on poverty in ethiopia by analysing panel data covering 1994 97 a period of economic recovery driven by peace good weather and much improved macroeconomic management the analysis of poverty shows land ownership education type of crops planted occupations in urban areas dependency ratios and location to be important determinants the characteristics of households that fell into or escaped from poverty are examined in addition the profile of those that remained poor during the period the chronic poor is looked at in rural areas the cultivation of a nontraditional export crop chat has significantly improved the welfare of households primary education plays a more important role in improving welfare in urban than in rural areas decomposition of changes in poverty into growth and redistribution components indicates that potential poverty reduction due to the increase in real per capita income was to some extent counteracted by worsening income distribution the implications of the results for a propoor policy are discussed

an economic or political kuznets curve this paper examines two closely related empirical hypotheses an economic kuznets curve and a political kuznets curve we find a robust inverted u relationship between income inequality and political development but not one between income inequality and economic development exploring the cross section aspect of the panel data we find that the economic kuznets curve is sensitive to different control specifications and to different functional specifications but the political kuznets curve is robust using dynamic panel data estimation we find that the economic kuznets curve does not hold up intertemporally while the political kuznets curve does

energy consumption carbon dioxide emissions and economic development evaluating alternative and plausible environmental hypothesis for sustainable growth abstract pursuit of excellence in economic development in the midst of damaging the natural environment is a shameless growth the economic impacts on environmental degradation are quite visible in industrialized economies where human health is compromised by rapid economic growth and energy induced emissions this study examines the interrelationship between energy consumption economic growth and carbon dioxide co2 emissions under the six alternative and plausible hypothesis including environmental kuznets curve ekc pollution haven hypothesis phh population based emissions ipat energy led emissions sectoral growth emissions and emissions emancipated human development index ehdi in the context of low and middle income countries high income countries and in aggregated panel over the period of 1975 2015 the results supported the ekc hypothesis ipat hypothesis energy induced emissions and sectoral growth emissions in different regions of the world while phh and ehdi hypothesis does not confirm across regions this study exclusively determines the key socio economic and environmental problems in a large pool of the world economies to understand the need of development policy agenda for sustainable growth

economic growth and inequality the role of public investment the relationship between growth and inequality is complex after discussing some general background issues motivated by extensive empirical evidence this paper focuses on public investment as a key determinant of the relationship two alternative frameworks each offering sharply contrasting perspectives are presented the first employs the representative consumer theory of distribution where agent heterogeneity originates with wealth endowments it yields an equilibrium in which aggregate dynamics drives distributional dynamics in the second agent heterogeneity arises from idiosyncratic productivity shocks and generates an equilibrium in which distributional dynamics drive growth the impact of government investment on growth and inequality are shown to contrast sharply in the two approaches thus illustrating the complexity of the growth inequality relationship

implications of consumer heterogeneity in time series estimates of us money demand the money demand function has traditionally been estimated with income and interest rates typically employing quite lengthy time series controversy however surrounds the importance of heterogeneous agents in monetary economics and throughout macroeconomics more generally in particular if proportions of agents with different traits and hence different money demands are changing over time ignoring those changes may bias estimated income and interest elasticities this concern as well as that of appropriate functional form is explored here controlling for consumer heterogeneity has surprising effects on the estimated elasticities of traditional variables

income inequality and colonialism this paper proposes that colonialism is a major explanation behind today s differences in income inequality across countries we argue that income inequality has been higher in the colonies where the percentage of european settlers to total population was higher as long as europeans remained a minority the countries where europeans became the majority of the population did not suffer from high inequality these initial differences continue to hold today the empirical evidence we provide strongly supports our thesis

inequality in sub saharan africa new data and new insights from anthropometric estimates reliable information on inequality within countries is highly scarce especially for less developed countries ldcs using anthropometric measures we extend the inequality database for sub saharan africa to no less than 28 countries over six five year periods from 1950 to 1980 and to some 200 regions within those countries in this process we also test in depth the validity of objections against the derivation of inequality measures from height data in a second step we test the determinants of inequality within and between the 200 regions under study our set of explanatory variables includes protein supply cash cropping industrial structure mineral resources distance to the countries capital urbanization education population density and ethnic fractionalization we find that monoculture cash cropping increases inequality whereas diversified cash cropping has the opposite effect

economic growth inequality and poverty estimating the growth elasticity of poverty summary this paper uses a new data set of 126 intervals from 60 developing countries to analyze the growth elasticity of poverty that is how much does poverty decline in percentage terms with a given percentage rise in economic growth the data set is both broader in coverage and more selective in terms of quality controls than those used in the past the study finds that while economic growth does reduce poverty in developing countries the rate of poverty reduction depends very much on how economic growth is defined controlling for changes in income inequality when economic growth is measured by changes in survey mean income consumption the growth elasticity of poverty excluding eastern europe and central asia is 2 79 that is a 10 increase in the survey mean will reduce poverty 1 00 person day by 27 9 but when growth is measured by changes in gdp per capita the growth elasticity of poverty is a statistically insignificant 2 27 which is lower than has previously been estimated

trade off between structural diversity and economic objectives in forest management a measure of divergence nad between the distribution of individuals in a community and a target distribution is presented when the latter is uniform nad measures evenness and exhibits a strong correlation with the widely used shannon index however nad offers the capability to incorporate an arbitrary composition in an economic optimization model where the shannon index is not applicable an empirical application to optimum management of a multispecies forest is presented and the trade off between ecological and economic objectives is investigated

semiparametric bayesian inference of the kuznets hypothesis abstract in contrast to the parametric quadratic specification used for examining the kuznets hypothesis this study relies on the semiparametric bayesian inference of the partially linear regression to re assess the validity of an inverted u shape of the kuznets curve the simple framework permits us to perform estimation and model comparison in a unified way empirical results using cross sectional data on 75 countries indicate that there exists an approximately inverted hence asymmetric relation between inequality and per capita gdp moreover judged by the bayes factor overwhelming evidence is found in favor of our semiparametric specification finally robustness check using alternative measure of inequality and pool data confirms our findings

income inequality government expenditures and growth this paper investigates the relationship between income inequality and growth by utilizing the recently published deininger squire data set most of the recent empirical growth literature suggests a negative relationship between inequality and growth on the basis of reduced form growth equations this is also found in the author s study some effort is made to discuss the argument behind the perceived negative relationship between inequality and growth according to the fiscal policy approach a high level of income inequality leads to a higher demand for redistribution which in turn affects growth through resource allocation out of investment or through incentive distorting taxes needed to fund the redistribution it is suggested that the last mentioned relationship between government expenditure and growth is more likely to be non linear positive with small amounts and negative with large amounts such a relationship however is only found for public goods thus government expenditure on law and ord

life cycle effects structural change and long run movements in the velocity of money secular movements in the velocity of money in the united states have been puzzling after declining since the civil war velocity defined as the ratio of gross national product to currency plus demand deposits at commercial banks has steadily increased since world war ii by the late 1970s it had increased threefold over its 1946 value largely negating the decline of the previous seventy five years other definitions have also reversed their long run patterns the substantial decline in the ratio of gross national product to money holdings inclusive of time deposits at commercial banks ended in the postwar period as this ratio first rose and then held relatively steady through the 1970s since these trends hold for virtually all sectors of the economy selden 1961 research has sought aggregate explanations commonly the behavior of velocity is inferred from time series studies postulating a stable relationship between the demand for money and aggregate income and interest rates boorrnan and havrilesky 1972 goldfeld 1973 laidler 1969 these studies generally place responsibility for the rise in velocity on some combination of a relatively low income elasticity of the demand for money and a relatively large interest rate elasticity despite its acceptance such an approach is unsatisfying since it neglects the role of long run structural changes in explaining velocity movements thus the literature

income distribution factor endowments and trade openness abstract this paper studies the empirical links among factor endowments trade and personal income distribution by using panel data we show that land and capital intensive countries have a less equal income distribution while skill intensive countries have a more equal income distribution we also show that the effects of trade openness on inequality depend on factor endowments in a way consistent with several recent case studies but not with the simple hecksher ohlin framework our results are robust to the division of the sample according to level of income the inclusion of different regressors the use of different measures of trade openness and of relative factor abundance and tests for possible problems of endogeneity

income inequality and economic development evidence from the threshold regression model abstract using panel data we investigate the relationship between income inequality and economic development we employ a threshold regression model that allows for endogenous income thresholds and find strong evidence of a two regime split in our sample

work contracts and earnings inequality the case of chile great social inequality has been one of the worrisome features of economic development in latin america this study focuses on chile one of latin america s fastest growing economies with one of the highest levels of income inequality during the 1990s using micro level data from the 1994 and 2000 encuestas de caracterizacion socio economica this article examines the role of work contracts in explaining male and female earnings and earnings inequality among wage and salary workers over the second half of the 1990s the analysis distinguishes between wage and salary work without a work contract referred to as informal work and wage and salary work with a work contract within the latter group the study further differentiates by the type of work contract held such as permanent and a variety of contingent work contracts the findings reveal that the majority of employees in informal and contingent wage and salary work arrangements earned significantly less than their permanent counterparts additiona

the value of time and the transactions demand for money this paper reexamines the hypothesis of dean s dutton and william p gramm and edi karni that the wage rate influences the demand for money as a proxy for the value of transactions time it develops value of time transactions models which yield demand for money equations that have a real wage rate argument and compares it to a non value of time alternative that does not the author finds that the value of time models perform well and that the value of time effect is empirically significant copyright 1990 by ohio state university press

production risk and the functional distribution of income in a developing economy tradeoffs and policy responses abstract we develop a stochastic endogenous growth model to examine the relationship between the volatility of growth and the factor distribution of income our framework incorporates two important features of developing economies the co existence of a modern and a traditional sector and the fact that the income generated in the traditional sector can escape taxation the relationship between volatility and factor distribution is complex depending upon the source of risk and the elasticity of substitution between capital and labor in the formal sector the policy options available to the government for counteracting changes in volatility are analyzed the second best optimal tax structure is also characterized

is there a social kuznets curve the influence of labour standards on inequality abstract this study empirically investigates the impact of core labour standards on income inequality for a range of 90 countries from 1990 2000 a synthetic index of labour standards is computed by means of a multiple correspondence analysis and no significant correlation is found with the gini index one of the reasons pointed out is that the effective implementation of core labour standards depends on the quality of the country s political and legal systems using instrumental variables in a tsls model we found an inverse u shaped curve between the new endogenous index of core labour standards and income inequality

on the impact of financial development on income distribution time series evidence financial market development is said to have equalizing or unequalizing effects on income distribution previous research used cross sectional and panel data and provided mixed results suspecting that they suffer from aggregation bias we adhere to time series data and error correction modeling technique and address the issue one more time in each of the 17 countries for which we have time series data in 10 counties short run effects of financial market development on income distribution were found to be equalizing in five countries the effects were unequalizing however the equalizing effects lasted into the long run only in three countries of denmark kenya and turkey

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

income velocity and institutional change some new time series evidence 1870 1986 this paper applies tests of cointegration to assess whether institutional factors in addition to income and an interest rate explain the long run behavior of velocity over a century of annual data from five industrialized countries are used institutional characteristics make a significant contribution to the determination of velocity in all the countries considered one generally rejects the hypothesis of cointegration between velocity and its traditional determinants but the same hypothesis cannot be rejected when velocity is also a function of institutional change proxies tests of coefficient stability also reinforce the validity of the institutional change hypothesis of velocity copyright 1993 by ohio state university press

inequality and development across and within countries summary this paper provides a cross country comparison of how income inequality has evolved within countries at different levels of development it uses overlapping nonparametric regression which allows visual comparisons of inequality both within and across countries as a result the methodology allows more specific conclusions than cross country regressions and yet is more general than within country case studies the approach highlights the problematic conclusions that can arise with parametric regressions in particular with tests of the kuznets curve while some previous results are confirmed some new results on inequality across countries are also discovered

the impact of changes in human fertility on poverty household survey data for developing and transitional economies are used to estimate the effect of fertility crude birth rate net of infant deaths on private consumption poverty cross national regressions indicate that higher fertility increases poverty both by retarding economic growth and by skewing distribution against the poor our median country in 1980 had dollar a day poverty incidence of 18 9 per cent had it reduced its fertility by four per 1 000 throughout the 1980s the sample median fall it is estimated that incidence would have been reduced to 13 9 per cent the growth and distribution effects being roughly equally responsible for this reduction

refitting the kuznets curve using a gender specific threshold model abstractprevious studies have reached mixed conclusions regarding the relationship between inequality and per capita income these studies however fail to consider gender differences in income inequality and how these may impact on the relationship between income inequality and per capita income using australian taxation statistics we derive three sets of gini coefficients i e female male and total for the period 1950 2013 we then examine the relationship between inequality and real per capita income and find that a gender specific threshold panel regression outperforms three other conventional models our findings suggest that one set of coefficients does not fit all in that the use of aggregate and constant coefficients may mask variations within and between gender inequality over time

a heterogeneous model of disposition effect a portfolio choice model is provided to illustrate the disposition effect under irrational belief in mean reversion assumption higher cognitive reference stronger irrational belief in mean reversion magnitude and less risk aversion all strengthen the disposition effect in the model the equilibrium market interest rate is priced after the market clearing condition is employed the grater disposition effect reduces the capital mobility from the stock market to the bond market and thus mitigates the dropping of the market interest rate

neoliberalism and income distribution in latin america abstract this paper reviews the principal neoliberal policy measures instituted in latin america in the last decade and their impact on equity it first emphasizes the difficulty of separating the impact of liberalization measure from the necessary fiscal adjustments of the 1980s and their transitional vs longrun effects and then places the observed movements in distribution in global and historical context the second part places several innovations of neoliberal regimes in historical perspective and argues that their overall impact is unlikely to be regressive and that previous regimes were probably not especially progressive over the long run developments in factor markets the demand side driven by reoriented industrial growth and the increasing importance of the service sector interacting with the relative supplies of skilled and unskilled labor are likely to be of overriding importance in determining the evolution of the distribution of income

inherent inequality and the optimal graduation of marginal tax rates in most countries marginal tax rates increase with income this is at variance with the results of the optimal income taxation literature whose numerical calculations have established the presumption that optimal marginal tax rates should decline with income have the existing results of optimal income tax literature therefore established a presumption that the observed pattern is suboptimal the object of this paper is to attempt to answer this question the numerical calculations that followed mirrlees s 1971 pioneering contribution tried many variations on his basic parametrisation including different preference structures and different functional forms however so far as we are aware most of the reported results maintain his basic assumption of a log normal distribution of abilities or wages with a standard deviation of logs of 0 39 mirrlees 1971 himself appealed the work of lydall 1969 for this figure but it has become the industry standard we show in this paper that departures from this assumption in particular increases in inherent inequality can alter the qualitative pattern of optimal marginal tax rates dramatically contrary to the currently available calculations we show that the optimal graduation can indeed be such that marginal tax rates increase for the majority of the population which is consistent with the observed pattern but that there continues to exist a significant income range at the top where marginal tax rates decline which of course is counter to the observed pattern

does financial development contribute to poverty reduction the article examines the contribution of financial development to poverty reduction in developing countries building on earlier research which has established links between financial development and economic growth and between economic growth and poverty reduction the article tests for a causal process linking financial sector growth and poverty reduction the empirical results indicate that up to a threshold level of economic development financial sector growth contributes to poverty reduction through the growth enhancing effect the impact of financial development on poverty reduction will be affected however by any change in income inequality resulting from financial development

relationships between household consumption and inequality in the indian states current evidence on the relationships between growth and inequality is predominantly based on cross country data sets or panel data sets covering a small number of time periods but these relationships being fundamentally dynamic in nature need to be considered over a much longer time horizon available state level results from the national sample surveys in india provide such an opportunity this article uses this unique data set to examine the interrelationships between average consumption and inequality within states and test for causality distributional patterns of growth vary but there is strong evidence in many instances of a strong negative effect of initial inequality on subsequent growth

level of economic development and income inequality evidence from the postwar developed world using a recent high quality panel dataset on income distribution for 19 developed countries the postwar relation between the level of economic development and income inequality is estimated in terms of several kuznets type specifications contrary to what one might expect on the basis of kuznets s hypothesis inequality does not decline with an increase in income even at such high levels of development but shows an uninverted u pattern that is characterized by an initial decline and a subsequent increase in income inequality the estimates suggest that the position noted for the postwar united states is shared widely in the developed world

the kuznets hypothesis an indirect test abstract the quandt log likelihood ratio test used on cross country data shows that there is a break in the relationship between per capita gnp and income inequality the breakpoint occurs at a per capita between 696 and 773

the value of time and recent u s money demand instability much controversy has surrounded the u s money demand relationship or more precisely its stability this is rather disappointing in light of the central importance of money demand estimates for the formulation and implementation of effective monetary policy and for almost all theories of aggregate economic activity to date the vast majority of alternative money demand specifications have generally failed to produce a stable money demand function throughout the 1970s and 1980s

the kuznets process and the inequality development relationship abstract in his classic paper on economic growth and income inequality kuznets discussed the process of population shift from traditional to modern activities as the basis for a theory of distributional change during the course of development in this paper we present a formalization of the kuznets process conduct a general analysis of distributional change under this process and derive the functional forms of and conditions for a turning point in the inequality development relationship for six commonly used indices of inequality the functional form appropriate to each index is then estimated using cross section data on 60 developing and developed countries finally some extensions to the initial formalization of the kuznets process are considered

income distribution and development some stylized facts in recent years the relationship between income distribution and the process of development has come under increasing scrutiny much of the debate has focused on the hypothesis originally advanced by simon kuznets that the secular behavior of inequality follows an inverted u shaped pattern with inequality first increasing and then decreasing with development this hypothesis has become so much a part of the conventional wisdom on this subject that it has generated considerable skepticism about the welfare implications of the development process indeed on some interpretations developing countries face the grim prospect not just of increasing relative inequality but also of declining absolute incomes for the lower income groups

information the dual economy and development we examine the interactions between different institutional arrangements in a general equilibrium model of a modernizing economy there is a modern sector where productivity is high but information asymmetries are large and a traditional sector where productivity is low but information asymmetries are small consequently agency costs in the modern sector make consumption lending difficult while such lending is readily done in the traditional sector the resulting trade off between credit availability and productivity implies that not everyone will move to the modern sector in fact the laissez faire level of modernization may fail to maximize net social surplus this situation may also hold in the long run in a dynamic version of the model a trickle down effect links the process of modernization with reduction in modern sector agency costs this effect may be too weak and the economy may get stuck in a trap and never fully modernize the two sector structure also yields a natural theoretical testing ground for the kuznets inverted u hypothesis we show that even within the sectoral shifting class of models this phenomenon is not robust to small changes in model specification

inequality and growth in the united states is there asymmetric response at the state level a previous study that tried to assess the impact of economic growth on income inequality in the u s used state level data and an ardl panel model to conclude that economic growth worsens income in

the long run behavior of the income velocity of money in five advanced countries 1870 1975 an institutional approach the income velocity of money in canada the united states great britain norway and sweden displays a u shaped pattern over the last one hundred years this paper presents and tests empirically an explanation for this secular pattern emphasizing the influence on velocity of institutional changes the inclusion into a simple velocity function of institutional developments such as the process of monetization the spread of commercial banking financial development and the growth of economic stability improves the explanation of long run movements in velocity provided by a regression of velocity on real permanent income per head and the interest rate

the personal and the factor distributions of income in a cross section of countries abstract the shares of capital and labour in national income vary substantially both over time and across countries this paper shows that the factor distribution of income is an essential determinant of the personal distribution of income we use cross country and panel data for a group of developed and developing countries to show that a larger labour share is associated with a lower gini coefficient of personal incomes this effect is not only statistically significant but also economically important an increase in the labour share in mexico to that observed in the us would reduce the gini coefficient of the former by between two and five points

some qualms about the test of the institutionalist hypothesis of the long run behavior of velocity this paper expresses econometric qualms about bordo and jonung s 1981 analysis of long run velocity they did not recognize that for u s and canadian data the log of velocity has a unit root hence estimation of a log level regression may produce spurious regressions when bordo and jonung s velocity equation is reestimated in rate of change form permanent income is significant contrary to their earlier conclusion moreover using this approach gives a stronger result for one of the institutional variables in the velocity function in the sense that the remaining variables become more significant

the simultaneous evolution of growth and inequality research on inequality and growth can be divided into two strands one deriving from kuznets and lewis has tried to identify a mechanistic relationship between growth or level of income and inequality the other has tried to find causal explanations of growth and inequality treating each independently in this paper we draw from both strands to test whether growth and inequality are the joint outcomes of other variables and processes we find that simultaneous examination of growth and inequality yields significantly different results and has different consequences for policy from previous independent studies the empirical literature on growth and inequality can be divided into two broad strands one following the pioneering work of kuznets and lewis is motivated by the pessimistic conjecture that the process of growth and development somehow requires increasing inequality at least in the early stages this has led to many efforts to identify a mechanical relationship between the level of development and inequality anand and kanbur 1993 or to determine whether faster growth requires higher or lower inequality the second strand has sought to identify the causal factors influencing the evolution of growth and inequality independently this research has looked either at growth for example barro and sala i martin 1995 or at inequality li et al 1997 but has not tried to identify those factors that might simultaneously influence both growth and inequality 2 thus the literature that looks simultaneously at growth and inequality descending most notably from kuznets 1955 relates them in a mechanistic manner that ignores or minimises the role of other causal factors including policy while the literature that incorporates other causal factors including policies looks independently at growth and inequality neither approach is particularly convincing from a theoretical standpoint the evolution of growth and inequality must surely be the outcome of similar processes in addition neither approach is particularly useful for the policy maker who needs to balance the impact of policies on both growth and distribution in this paper we investigate whether growth and inequality are simultaneously determined and if so whether or not they are subject to

estimating long run economic equilibria with stochastic trends an asymptotic theory is provided to analyze a menu of currently existing estimators of cointegrated systems we study in detail the single equation ecm seecm approach of hendry our theoretical results lead to prescriptions for empirical work such as specifying seecm s nonlinearly and including lagged equilibrium relationships rather than lagged differences of the dependent variable as covariates simulations support these prescriptions and point to problems of overfitting not encountered in the semiparametric approach of phillips and hansen 1990

poverty and growth in india over six decades we study the evolution of consumption poverty measures for post independence india including 20 years since extensive economic reforms began in 1991 progress against poverty was negligible until the mid 1970s after which a downward trend in poverty measures emerged the pace of poverty reduction accelerated in the post reform period despite rising inequality amidst faster growth a key finding is that the relationship to the pattern of growth changed greatly suggesting stronger intersectoral linkages with urban consumption growth benefiting both the rural and urban poor in contrast to the pre reform period growth in primary secondary and tertiary sector outputs yielded similar impacts on poverty

growth and poverty evidence for developing countries in the 1980s abstract measures of consumption poverty for a sample of developing countries in the 1980s respond elastically to changes in mean consumption although there is a high variance in poverty outcomes at a given rate of growth there is no sign of systematic effects of growth on inequality