“Income Inequality and Economic Growth: How Do They Matter?” by Danny QUAH
However growth and inequality—within or across countries—are determined, their differential impact on poverty and welfare can be assessed by direct calculation, with minimal auxiliary assumptions. This paper finds that the data speak strongly and clearly: For determining world inequalities, the forces assuming first-order importance are those macroeconomic ones determining cross-country patterns of growth and convergence. Inequality across individuals worldwide remains a critical issue of increasing concern. However, the relation between a country's growth performance and its within-country inequality plays only a tiny role in global inequality dynamics.