Why is income inequality necessary for economic growth? If income equality is achieved, will economic growth stagnate?
Intense emotions tend to gather on the issue of income inequality with many scholars rallying the negative impacts of income inequality on economic growth. There may not be one best positive impact of income inequality, but a careful thought on the causal and consequences of income inequali...
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| Format: | Theses and Dissertations |
| Language: | English |
| Published: |
2015
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/64806 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | Intense emotions tend to gather on the issue of income inequality with many
scholars rallying the negative impacts of income inequality on economic
growth. There may not be one best positive impact of income inequality, but
a careful thought on the causal and consequences of income inequality will
shed light that beyond the negativity, positive impacts of income inequality on
economic growth are also worth investigating. I argue in this paper that
income inequality is necessary for economic growth and I state three such
positive impacts. I explore an assumption of zero income inequality where
stagnated economic growth is observed. I discuss three plausible means to
tackle the issue of income inequality in the paper.
Based on the findings, I conclude that income inequality is part and parcel of
economic growth. It is an element of economic growth which cannot be
eradicated but can be reduced to a reasonable level. In addition, there are
measures which policymakers can take to manage the income inequality
more effectively.
Keywords: income inequality, economic growth, acceptable level of income
inequality. |
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