Income Inequality, Poverty and Economic Development

Mitja Steinbacher

DIncome Inequality, Poverty and Economic Development

Key words: poverty, trickle-down growth, economic development

Abstract:
This article discusses the relationships between economic growth, inequality and poverty. It aims at shedding some empirical and theoretical light on the call that Pope Francis made about reducing poverty by redistribution from wealthy to underdeveloped world. The article brings an overview of some of the basic factors and empirical studies of income inequality and poverty. It presents the trickle-down hypothesis about the distribution of growth and its relation to poverty reduction. It turns out that empirical studies about poverty depend on the specific collection of data from poor regions that are by its nature of collection biased downwards. Globally speaking, poverty in poor regions is in its decline and growth in its rise.

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