Trends in Income Inequality and Its Impact on Economic Growth

In recent years, climate change and the pandemic have brought the issue of the link between inequality and economic growth to the fore. In my essay, I examine this relationship, focusing on whether inequality has a positive or negative effect on economic growth. I approach the issue through the lens of income inequality without seeking to explore all aspects of inequality. Starting from the relevant conceptual framework, I present the link between global inequality and long-term growth. Since inequalities affect both developed and developing countries, I compare them and show why the latter cannot repeat the economic progress achieved by earlier industrialisers. Finally, I conclude that the clear objective should be to reduce excessive inequalities.