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Title: :  A study on relationship between income inequality and economic growth in developed vs. developing countries
PaperId: :  24898
Published in:   International Journal Of Advance Research And Innovative Ideas In Education
Publisher:   IJARIIE
e-ISSN:   2395-4396
Volume/Issue:    Volume 4 Issue 4 2018
DUI:    16.0415/IJARIIE-24898
Licence: :   IJARIIE is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Author NameAuthor Institute
Mr. Veeranna S CSmt. Rukmini Shedthi Memorial National Government First Grade College, Barkur

Abstract

Economics
Income Inequality, Economic Growth, Developed Countries, Developing Countries, Inclusive Growth
This study critically examines the complex and bidirectional relationship between income inequality and economic growth in both developed and developing countries, exploring the diverse theoretical frameworks and empirical evidence that suggest while income inequality can potentially spur economic growth by providing incentives for investment and innovation, particularly in contexts where capital accumulation and entrepreneurial activity are driven by wealth concentration, the adverse effects of inequality, such as reduced social cohesion, underinvestment in human capital, and increased political instability, often outweigh these benefits, particularly in developing countries where weak institutions, limited access to education, and inadequate social safety nets exacerbate the negative impact of inequality on long-term growth, as highlighted by studies such as those by Forbes (2000) and Barro (2000), which illustrate the nuanced and context-dependent nature of this relationship, with further empirical research by Ostry, Berg, and Tsangarides (2014) indicating that in developed countries, moderate levels of inequality may coincide with robust economic growth, driven by technological advancements and high levels of human capital, yet excessive inequality can still undermine growth by stifling social mobility and reducing aggregate demand, as supported by Piketty (2014) and Stiglitz (2012), who emphasize that the increasing concentration of wealth in developed economies can lead to economic stagnation and social unrest, thereby necessitating policies aimed at redistributing income through progressive taxation and social welfare programs to ensure sustainable and inclusive growth; moreover, this study explores how the relationship between inequality and growth differs between developed and developing countries, with empirical evidence from developing nations, such as those provided by Deininger and Squire (1998), suggesting that high levels of inequality can severely hinder economic development by limiting access to education and healthcare, reducing productivity, and perpetuating cycles of poverty, thereby highlighting the importance of inclusive growth strategies that address the structural factors contributing to inequality, such as land distribution, access to credit, and the role of governance, ultimately concluding that while income inequality and economic growth are intrinsically linked, the nature and direction of this relationship are highly contingent upon the specific economic, social, and institutional contexts of each country, necessitating a nuanced approach to policy-making that takes into account the varying impacts of inequality on growth across different stages of development.

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IJARIIE Mr. Veeranna S C. "A study on relationship between income inequality and economic growth in developed vs. developing countries" International Journal Of Advance Research And Innovative Ideas In Education Volume 4 Issue 4 2018 Page 1377-1387
MLA Mr. Veeranna S C. "A study on relationship between income inequality and economic growth in developed vs. developing countries." International Journal Of Advance Research And Innovative Ideas In Education 4.4(2018) : 1377-1387.
APA Mr. Veeranna S C. (2018). A study on relationship between income inequality and economic growth in developed vs. developing countries. International Journal Of Advance Research And Innovative Ideas In Education, 4(4), 1377-1387.
Chicago Mr. Veeranna S C. "A study on relationship between income inequality and economic growth in developed vs. developing countries." International Journal Of Advance Research And Innovative Ideas In Education 4, no. 4 (2018) : 1377-1387.
Oxford Mr. Veeranna S C. 'A study on relationship between income inequality and economic growth in developed vs. developing countries', International Journal Of Advance Research And Innovative Ideas In Education, vol. 4, no. 4, 2018, p. 1377-1387. Available from IJARIIE, http://ijariie.com/AdminUploadPdf/A_study_on_relationship_between_income_inequality_and_economic_growth_in_developed_vs__developing_countries_ijariie24898.pdf (Accessed : ).
Harvard Mr. Veeranna S C. (2018) 'A study on relationship between income inequality and economic growth in developed vs. developing countries', International Journal Of Advance Research And Innovative Ideas In Education, 4(4), pp. 1377-1387IJARIIE [Online]. Available at: http://ijariie.com/AdminUploadPdf/A_study_on_relationship_between_income_inequality_and_economic_growth_in_developed_vs__developing_countries_ijariie24898.pdf (Accessed : )
IEEE Mr. Veeranna S C, "A study on relationship between income inequality and economic growth in developed vs. developing countries," International Journal Of Advance Research And Innovative Ideas In Education, vol. 4, no. 4, pp. 1377-1387, Jul-Aug 2018. [Online]. Available: http://ijariie.com/AdminUploadPdf/A_study_on_relationship_between_income_inequality_and_economic_growth_in_developed_vs__developing_countries_ijariie24898.pdf [Accessed : ].
Turabian Mr. Veeranna S C. "A study on relationship between income inequality and economic growth in developed vs. developing countries." International Journal Of Advance Research And Innovative Ideas In Education [Online]. volume 4 number 4 ().
Vancouver Mr. Veeranna S C. A study on relationship between income inequality and economic growth in developed vs. developing countries. International Journal Of Advance Research And Innovative Ideas In Education [Internet]. 2018 [Cited : ]; 4(4) : 1377-1387. Available from: http://ijariie.com/AdminUploadPdf/A_study_on_relationship_between_income_inequality_and_economic_growth_in_developed_vs__developing_countries_ijariie24898.pdf
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