IS EQUALITY REALLY GROWTH-PROMOTING

It has been shown that the more uneven the initial distribution of inc ome, the less an economy is expected to grow. Employing so-called Extr eme Bounds Analysis (EBA), it is found that the direct effect of incom e distribution on growth is fragile. This applies to both democracies and dictatorships. It has also been suggested that income distribution will have different effects when applied to developing as opposed to developed economies. However, the results show that income distributio n has the same effect in both developed and developing countries. None theless, this relationship is also fragile.