Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty

No 7733, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A fundamental question in social sciences relates to the effect of wealth inequality on economic growth. Yet, in tackling the question, researchers have had to use income as a proxy for wealth. We derive a global measure of wealth inequality from Forbes magazine's listing of billionaires and compare its effect on growth to the effects of income inequality and poverty. We find that wealth inequality reduces economic growth, but when we control for the fact that some billionaires acquired wealth through political connections, the effect of politically connected wealth inequality is negative, while politically unconnected wealth inequality, income inequality, and initial poverty have no significant effect.

Keywords: billionaires; income inequality; wealth inequality; economic growth; political connections (search for similar items in EconPapers)
JEL-codes: D31 O40 O43 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2013-11
New Economics Papers: this item is included in nep-dev, nep-ltv, nep-pbe and nep-pol
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Citations: View citations in EconPapers (10)

Published - published in: Journal of Comparative Economics, 2015, 43 (3), 505-530

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Related works:
Journal Article: Does wealth inequality matter for growth? The effect of billionaire wealth, income distribution, and poverty (2015)
Working Paper: Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty (2014)
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