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Inequality, Redistribution, and Growth in Developed Countries

Inequality, Redistribution, and Growth in Developed Countries
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Year:    2018

Author:    Festa, Andrea

Applied Economics Quarterly, Vol. 64 (2018), Iss. 4 : pp. 297–323

Abstract

Abstract

This paper examines the effect of inequality and redistribution on growth in a panel of developed OECD countries with dynamic fixed effects (DFE) estimates. It is found out that redistribution is neutral to growth while disposable inequality is weakly positive for long-run aggregate output. Population growth is also a determinant of aggregate output. On the other hand, the analysis does not find evidence of a significant effect of both inequality and redistribution in the short-run as well as of top and bottom inequality. The analysis suggests that in economies that are more unequal a win-win process to increase equality and growth through redistributive taxes is likely to be effective, even if the overall effect is low and time demanding.

JEL classifications: O11, O15, O47, E62, H23

Keywords: Inequality, Redistribution, Growth

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Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/aeq.64.4.297

Applied Economics Quarterly, Vol. 64 (2018), Iss. 4 : pp. 297–323

Published online:    2018-12

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    27

Author Details

Festa, Andrea

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Section Title Page Action Price
Andrea Festa: Inequality, Redistribution, and Growth in Developed Countries 1
Abstract 1
1. Introduction 1
2. Background and Literature 2
3. Data and Methodology 8
4. Results 1
5. Conclusions 1
References 1
Annex 1: List of Figures 1
Annex 2: List of Countries 2
Annex 3: List of Variables 2
Annex 4: Empirical Estimates 2