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It has been suggested that inequality is an unpleasant precondition for growth. This paper shows that the empirical evidence strongly supports the opposite view: that inequality is negatively correlated with growth. This result is robust across different inequality measures, and to many different specifications of the growth regression. Furthermore, inequality appears to have a negative effect on both democracies and non-democracies. Interaction terms between inequality and regime type, when included in the base regression, do not affect the sign or significance of the inequality variables.
George R. G. Clarke (Tue,) studied this question.