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Inequality and Growth

The presence of an inverse-U-shaped relationship, the Kuznets curve, between income inequality and GDP per capital has been found across many countries and over time. Yet the Kuznets curve fails to explain much of the variation in income inequality. In terms of the impact of income inequality on GDP growth rates, existing theories provide little clear empirical predictions on the overall relationship. In fact, there is some evidence that inequality is bad for growth in poor countries and good for growth in rich countries. The seminar will provide updated cross-country evidence on the relationship between income inequality and economic performance in the context of globalization.

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Besides the above, participants will learn:

• whether international trade has a regular relationship with income inequality and whether this relationship has changed over time; and
• whether the Kuznets curve has shifted in recent years.

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• all ADB staff, consultants and members of the Board
• academicians, policymakers and other government officials, NGOs and the media

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• Robert Barro, Professor of Economics, Harvard University*

Robert J. Barro is Paul M. Warburg Professor of Economics at Harvard University, a senior fellow of the Hoover Institution of Stanford University, and a research associate of the National Bureau of Economic Research. He has a Ph.D. in economics from Harvard University and a B.S. in physics from Caltech. Barro is co-editor of Harvard’s Quarterly Journal of Economics and was recently President of the Western Economic Association and Vice President of the American Economic Association. He was a viewpoint columnist for Business Week from 1998 to 2006 and a contributing editor of The Wall Street Journal from 1991 to 1998. He has written extensively on macroeconomics and economic growth. Noteworthy research includes empirical determinants of economic growth, economic effects of public debt and budget deficits, and the formation of monetary policy. Recent books include Macroeconomics: A Modern Approach, Economic Growth (2nd edition, written with Xavier Sala-i-Martin), Nothing Is Sacred: Economic Ideas for the New Millennium, Determinants of Economic Growth, and Getting It Right: Markets and Choices in a Free Society. Current research focuses on two very different topics: the interplay between religion and political economy and the impact of rare disasters on asset markets.

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