Distributions in motion: economic growth, inequality, and poverty dynamics

No 5424, Policy Research Working Paper Series from The World Bank

Abstract: The joint determination of aggregate economic growth and distributional change has been studied empirically from at least three different perspectives. A macroeconomic approach that relies on cross-country data on poverty, inequality, and growth rates has generated some interesting stylized facts about the correlations between these variables, but has not shed much light on the underlying determinants."Meso-"and microeconomic approaches have fared somewhat better. The microeconomic approach, in particular, builds on the observation that growth, changes in poverty, and changes in inequality are simply different aggregations of information on the incidence of economic growth along the income distribution. This paper reviews the evolution of attempts to understand the nature of growth incidence curves, from the statistical decompositions associated with generalizations of the Oaxaca-Blinder method, to more recent efforts to generate"economically consistent"counterfactuals, drawing on structural, reduced-form, and computable general equilibrium models.

Keywords: Rural Poverty Reduction; Achieving Shared Growth; Inequality; Services&Transfers to Poor; Economic Theory&Research (search for similar items in EconPapers)
Date: 2010-09-01
New Economics Papers: this item is included in nep-dev and nep-fdg
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Citations: View citations in EconPapers (19)

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Working Paper: Distributions in motion: Economic growth, inequality, and poverty dynamics (2010)
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