Title:	Inequality and Growth in Modern China
Authors:	Guanghua Wan
Keywords:	Inequality
Issue Date:	2008
Publisher:	Oxford University Press
Description:	It is accepted that growth helps reduce poverty without a worsening distribution of income and that income inequality is positively correlated with poverty in the absence of economic growth (Bourguignon 2004). The real world, of course, does not operate that way. Typically, growth (negative or positive) and inequality changes (rising or declining) occur simultaneously, making it difficult to disentangle their separate effects on poverty. Moreover, the relationship between growth and inequality is complex. There exist many channels through which economic growth may affect income or welfare distribution. Meanwhile, future growth and poverty profile depend on the current level and dynamics of inequality. The well-known Kuznets hypothesis has been tested in countless cases, and yet no consensus has been reached regarding the impact of growth on inequality. On the other hand, a large literature has recently emerged which aims at explaining the mechanisms and consequences of changing inequality on growth (Banerjee and Duflo 2003). Again, no conclusion can be drawn so far. Clearly, much research, theoretical as well as empirical, is called for in order to better understand the poverty–growth–inequality (PGI) triangle. Such a lack of understanding on the triangle poses a challenge or dilemma to development strategists and policymakers: should growth or inequality be prioritized in the design and execution of economic policies?
URI:	http://10.6.20.12:80/handle/123456789/44820
ISBN:	978–0–19–953519–4
Appears in Collections:	Regional and Local Development Studies

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