2016 Essays
Billionaires and Growth
A fundamental question in social sciences relates to the effect of wealth inequality on economic growth. Yet, in tackling the question, researchers have had to use income as a proxy for wealth. We derive a global measure of wealth inequality from Forbes magazine’s listing of billionaires and compare its effect on growth to the effects of income inequality and poverty. Our results suggest that wealth inequality has a negative relationship with economic growth, but when we control for the fact that some billionaires acquired wealth through political connections, the relationship between politically connected wealth inequality and economic growth is negative, while politically unconnected wealth inequality, income inequality, and initial poverty have no significant relationship.
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Also Published In
- Title
- Milliken Institute Review
- URL
- http://www.milkenreview.org/articles/billionaires-and-growth?IssueID=6
More About This Work
- Academic Units
- International and Public Affairs
- Published Here
- July 19, 2016