Abstract

D. OSTRY, Jonathan; BERG, Andrew  and  TSANGARIDES, Charalambos G. Redistribution, Inequality, and Growth. Rev.econ.inst. [online]. 2014, vol.16, n.30, pp.53-81. ISSN 0124-5996.

This paper takes advantage of a recently-compiled cross-country dataset that distinguishes market inequality from net inequality and allows us to calculate redistributive transfers for a large number of country-year observations. Our main findings are: 1. More unequal societies tend to redistribute more. 2. Lower net inequality is robustly correlated with faster and more durable growth, for a given level of redistribution. 3. Redistribution appears generally benign in terms of its impact on growth; only in extreme cases is there some evidence that it may have direct negative effects on growth. Thus the combined direct and indirect effects of redistribution -including the growth effects of the resulting lower inequality- are on average pro-growth. While we should be cognizant of the inherent limitations of the data set and of cross-country regression analysis more generally, we should be careful not to assume that there is a big tradeoff between redistribution and growth. The best available macroeconomic data do not support that conclusion.

Keywords : Redistribution; inequality; growth.

        · abstract in Spanish     · text in Spanish     · Spanish ( pdf )