The Effect of Income Inequality on Economic Growth

1341 Words5 Pages
1. Introduction and Motivation Only one century ago we had no airplanes, no computer no cell phones, no internet, no luxurious Bmw`s to show off with. We had only simple versions of cars, trucks, telephone and black and white cameras. Less than one in five homes had running water, flush toilets, a vacuum cleaner or gas or electric heat. However, in the today`s world of shiny cars, luxurious apartments and houses equipped with appliances a man from the previous century cannot even imagine and with phones and computers that do the thinking instead of us, there is another world, a world that few of us pay attention to. What is striking about it, is that people live like the ones century ago, or even worse. Almost half of the world — over three billion people — live on less than $2.50 a day. 22,000 children die each day due to poverty, nearly a billion people entered the 21st century unable to read a book or sign their names, Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation. And while the richest 1% of the population owns about 46% of global wealth($110 trillion), the bottom 50% of the population barely owns $1.7 trillion (some 0.7% of the world's wealth), about the same as the world's 85 richest people. (http://www.globalissues.org/article/26/poverty-facts-and-stats) So, if somebody wonders why did I choose the subject of inequality the previous lines are exactly the reason. The hypothesis I will try to
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