TY  - RPRT
        AU  - Henderson, Daniel J.
AU  - Qian, Junhui
AU  - Wang, Le
        TI  - The Inequality-Growth Plateau
        PY  - 2015/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8771
        UR  - https://www.iza.org/index.php/publications/dp8771
        AB  - We examine the (potentially nonlinear) relationship between inequality and growth using a method which does not require an a priori assumption on the underlying functional form. This approach reveals a plateau completely missed by commonly used (nonlinear) parametric approaches - the economy first expands rapidly with a large decline in inequality, plateaus when inequality remains relatively stable, and then decreases rapidly with a large increase in inequality. This novel finding helps reconcile the conflicting results in the literature (using different parametric assumptions and datasets) and has important policy implications.
        KW  - inequality
KW  - growth
KW  - panel data
KW  - semiparametric
        ER  -