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- Title
IS THERE A 'DOUBLE BONUS' FROM REDUCING INEQUALITY?
- Authors
ASANO, AKIHITO
- Abstract
We study the effect of inequality on growth in an overlapping generations (OLG) model where inequality affects growth through accumulation of human capital and endogenous fertility. In contrast to much of the existing literature, we argue that the effect of inequality on growth might be non-monotonic. Our model suggests that the effect depends on the demographic stage of development: inequality impedes growth in low-fertility (high human capital) economies, but enhances growth in high-fertility (low human capital) economies. Our finding casts doubt on a 'double bonus' from reducing inequality in developing countries which are typically characterized by high fertility. ( JEL O40, J13, O15)
- Subjects
OVERLAPPING generations model (Economics); EQUALITY; HUMAN capital; ENDOGENOUS growth (Economics); HUMAN fertility; DEMOGRAPHIC transition; GROSS domestic product; PURCHASING power parity
- Publication
Economic Inquiry, 2012, Vol 50, Issue 2, p551
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/j.1465-7295.2010.00343.x