Inequality and economic growth

: are both walking hand in hand? : the case of Latin America

Abstract

The responsible for dictating policies, sometimes choose a path were they put in second plan the problematic of inequality which is intrinsically connected with other complex realities such as poverty. The conception is that income distribution in the long run will remain constant, so the best way to increase the life conditions of the population is betting in economic growth because there is not a plain relation among economic growth and inequality. The aim of the study performed in this thesis was to understand the correlation among inequality and economic growth. Does economic growth lead to a better situation of the population in a homogeneous way indeed? Or do those benefits not reach the entire population? A quantitative method was applied in this study in order to gather results and responses. The analysis was based on statistical measures of Pearson’s correlation derived from data of Gini Index and GDP indicators, since they are both able to represent the equity in distribution of income and economic growth respectively. The group of countries in which the analysis was performed was the Latin America. The results indicate that, if in one hand it was not proved a direct and undoubted connection among economic growth and a raise on inequality, on the other hand it was not proven that they are completely independent either. The fairest way to look at this problem is not the impact of economic growth on inequality and the other way around but how those economic growth policies are chosen and their impact on the society.

Date of Award	23 Feb 2012
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Susana Frazão Ferreira Fernandes Pinheiro (Supervisor)