Dienstag, 4. März 2014

Inequality and Growth

Mein Koautor Prakash hat mich auf eine neue Studie des IWF über den Zusammenhang zwischen ungleicher Einkommensverteilung und Wachstum hingewiesen.

Die Studie kommt zu dem interessanten Ergebnis, dass es für Länder mit hoher Einkommensungleichheit schwer ist, Perioden hohen Wachstums aufrecht zu erhalten.
"The relationship between income inequality and economic growth is complex. Some inequality is integral to the effective functioning of a market economy and the incentives
needed for investment and growth. But inequality can also be destructive to growth, for example, by amplifying the risk of crisis or making it difficult for the poor to invest in education. The evidence has also been mixed: some find that average growth over long periods of time is higher with more initial equality; others find that an increase in equality today tends to lower growth in the near term.

The empirical literature on growth and inequality, however, has missed a key feature of the growth process in developing countries: namely, its lack of persistence. Per capita incomes do not typically grow steadily for decades. Rather, periods of rapid growth are punctuated by collapses and sometimes stagnation—the hills, valleys, and plateaus of growth. Relating income distribution to long-run average growth may thus miss the point. The more relevant issue for many countries is: how is income distribution related to these sharp growth breaks? 

This note focuses on the duration of growth spells—defined as the interval starting with a growth upbreak and ending with a downbreak—and on the links between duration and various policies and country characteristics, including income distribution. It turns out that many of even the poorest countries have succeeded in initiating growth at high rates for a few years. What is rarer—and what separates growth miracles from laggards—is the ability to sustain growth. The question then becomes: what determines the length of growth spells, and what is the role of income inequality in duration?

We find that longer growth spells are robustly associated with more equality in the income distribution. For example, closing, say, half the inequality gap between Latin America and emerging Asia would, according to our central estimates, more than double the expected duration of a growth spell. Inequality typically changes only slowly, but a number of countries in our sample have experienced improvements in income distribution of this magnitude in the course of a growth spell. Inequality still matters, moreover, even when other determinants of growth duration—external shocks, initial income, institutional quality, openness to trade, and macroeconomic stability—are taken into account. 

A key implication of these results is that it is difficult to separate analyses of growth and income distribution. The immediate role for policy, however, is less clear. Increased inequality may shorten growth duration, but poorly designed efforts to lower inequality could grossly distort incentives and thereby undermine growth, hurting even the poor. There nevertheless may be some ―win-win‖ policies, such as better-targeted subsidies, improvements in economic opportunities for the poor, and active labor market policies that promote employment. When there are trade-offs between potential short-run effects of policies on growth and income distribution, the evidence presented in this note is not decisive. But the analysis below does perhaps tilt the balance towards the notion that attention to inequality can bring significant longer-run benefits for growth. Over longer horizons, reduced inequality and sustained growth may thus be two sides of the same coin."

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