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Banking is an ever green field of study. In these slides of Banking, the Lecturer has discussed following important points : Equality and Economic Growth, The Landscape, Investment, Education, Sources of Growth, Scheme of Things, Investment, Growth Is Exogenous, Stable Politics, Initial Income
Typology: Slides
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+ denotes a positive effect in the direction shown
+ denotes a positive effect in the direction shown
+ denotes a positive effect in the direction shown
Arthur Lewis: x is trade, stable politics, good weather Then Solow came along and said: growth is exogenous
+ denotes a positive effect in the direction shown
- denotes a negative effect in the direction shown
My first x was inflation (1976, 1991, 1996, 2001)
A new x will be foreign aid vs. FDI (with Radetzki et al.)
- (^) –
Today x is inequality (with Zoega)
-
Economic efficiency and social equality are incompatible, like oil and water
Redistribution is costly Blunts incentives to work and save and invest in education Leaky-bucket analogy
Inequality may trigger demands for redistribution that hurts growth It may also trigger demands for more and better education that helps growth
Inequality may lead to social conflict and political instability that hinder growth It may also lead to economic volatility
Inequality and growth Inequality and education Education and growth
75 countries
What is the empirical evidence?
y = -0,0799x + 2, R^2 = 0,
0
2
4
6
0 20 40 60 80
Gini coefficient
Per capita economic growth 1965-98, adjusted for
initial income
A 12 point increase in the Gini index goes along with a decrease in per capita growth by nearly 1% per year.
r = rank correlation
r = -0.
Gini = 25 ⇒ ratio = 3 (Nordic countries) Gini = 30 ⇒ ratio = 4 (Germany, Greece) Gini = 35 ⇒ ratio = 6 (Britain) Gini = 40 ⇒ ratio = 8 (US, China, Russia) Gini = 50 ⇒ ratio = 15 (Nigeria) Gini = 60 ⇒ ratio = 26 (Brazil)
Each ten-point increase in the Gini index
roughly doubles the 20/20 ratio