Growth, Inequality, and Poverty : A Robust Relationship?

Marrero, Gustavo A. ; Serven, Luis

World Bank, Washington, DC

关键词: GROWTH;    INEQUALITY;    POVERTY;    POVERTY TRAP;   

DOI  :  10.1596/1813-9450-8578
RP-ID  :  WPS8578

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

An extensive literature on poverty trapssuggests that high levels of poverty deter growth. However,a seemingly basic implication of the underlying theoreticalmodels, namely that countries suffering from higher levelsof poverty should grow less rapidly, has remained untested.A parallel literature has suggested a variety of mechanismsthrough which inequality may affect growth in opposingdirections. Because inequality and poverty are differentaspects of the income distribution, inequality can alsoaffect growth through poverty, an indirect channel that hasnot been explicitly analyzed. This paper contributes to fillboth gaps. Using a large cross-country panel data set, itestimates a reduced-form growth equation adding bothinequality and poverty to an otherwise standard set ofgrowth determinants. Given inequality, the correlation ofgrowth with poverty is consistently negative. In contrast,given poverty, the correlation of growth with inequality canbe positive or negative, depending on the empiricalspecification and econometric approach used. Yet, theindirect effect of inequality on growth through itscorrelation with poverty is robustly negative. Closerinspection shows that these results are driven by the sampleobservations featuring high (but not extremely high) povertyrates. These empirical findings are consistent with thepredictions from an analytical framework withlearning-by-doing and knowledge spillovers, in whichconsumers cannot save and invest if their initial endowmentis below a minimum consumption level.