The Impact Of Income Inequality On Economic Growth

2256 WordsNov 21, 201610 Pages
LITERATURE REVIEW The impact of Income Inequality on Economic Growth: A Case study on Nigeria Student Number: P14173106 Supervisor: Helen Solomon Module Leader: Helen Solomon Date: 26th November 2016 Word Count: 1.0 Introduction According to Adam Smith (1776) in his book the wealth of nations, “no society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable”. Economic growth and income inequality are central inter related facets that explain current trend in global issues. Oxfam (2016) suggested that 62 of the richest people have the same wealth as the 3.6 billion poorest people. The rich continue to acquire wealth, while the poor struggle for basic things required for survival like food, access to clean water and shelter. The research question proposed is: “Does income inequality have an impact on economic growth?”. This chapter highlights the key concepts and notions which underlie the subject matter of the study in order to provide an ideal frame for understanding the relationship between income inequality and economic growth and answering the research question. It will also look at previous empirical studies carried out by other researchers in this field and identify gaps in the existing literature. 2.0 Theoretical Framework and Empirical Evidence Inequality is generally referred to unfair distribution of resource among individuals. Inequality can vary from income, health, gender and wealth.
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