MORE EVIDENCE ON INCOME-DISTRIBUTION AND GROWTH

It has been suggested that inequality is an unpleasant precondition for growth. This paper shows that the empirical evidence strongly supports the opposite view: that inequality is negatively correlated with growth. This result is robust across different inequality measures, and to many different specifications of the growth regression. Furthermore, inequality appears to have a negative effect on both democracies and non-democracies. Interaction terms between inequality and regime type, when included in the base regression, do not affect the sign or significance of the inequality variables.