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Anorak | Inequality Caused By Cronyism Kills Economic Growth

Inequality Caused By Cronyism Kills Economic Growth

by | 9th, December 2013

cronies

 

INEQUALITY. Is it harmful? It can be. When caused by cronyism.

In other words, is it a bad thing for a country to have some really rich people? Again, it depends on how they got rich.

Sutirtha Bagchi of the University of Michigan’s business school and Jan Svejnar of Columbia’s School of International and Public Affairs studied how inequality correlates with economic growth. In general, more inequality meant slower growth, and less inequality meant faster growth.

But in many countries, over various time periods, growing inequality had no effect on economic growth. The new study suggests that an increase in inequality hurt the economy when the rich were getting rich through political connections.

That is, inequality hurts

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Posted: 9th, December 2013 | In: Money, News, Politicians Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink