This paper examines the effects of income inequality in a risk sharing model with limited commitment, that is, when insurance agreements have to be self-enforcing. In this context, numerical dynamic programming is used to examine three questions. First, I consider heterogeneity in mean income,...

Although there are numerous empirical studies on the effect of trade facilitation on international trade and GDP, there have been no studies on the association between trade facilitation and poverty as well as inequality. This paper examines this association in low and middle income countries...

Panel data on 54 developing countries between 1960 and 2000 are used to investigate how the impact of opening to trade on economic growth is affected by wealth inequality. The results suggest (a) that opening to trade tends to accelerate growth but (b) that the addition to growth depends...

Zak & Knack (2001) demonstrate that interpersonal trust substantially impacts economic growth, and that sufficient interpersonal trust is necessary for economic development. To investigate the ability of policy-makers to affect trust levels, this paper builds a formal model characterizing public...

We present evidence that ethnic fragmentation explains variations in per capita income, institutions, and schooling better than income inequality when both are treated as endogenous. To do so, we identify instruments for ethnic fractionalization and income inequality based on historical...

Corruption increases inequality in the society (Gupta et al, 1998) by reducing economic growth, biasing the tax system, reducing the amount and the efficiency of spending on key areas for human capital formation. Mohtadi and Roe (2002) and Mohtadi and Agarwhal (2002) argue that democracy first...

Empowerment of the poor does not necessarily make them better off – or make the non-poor worse off. In some cases, empowerment may be inefficient, i.e. a negative-sum game. In other cases, it is a zero-sum game, as the poor can benefit only at the expense of someone else. But in many cases, it...

The hypothesis is that Pareto and Kaldor-Hicks Efficiency have an aspect of sustainability in relation to inequality. The analysis finds efficient situations reached increasing inequality as diminishing in the long term effective demand in a larger measure than counterbalancing increases thanks...

Since the 1980s, the labour demand has shifted toward more educated workers in the US. The most common explanation is that the productivity of skilled workers has risen relative to the unskilled, but it is not easy to explain why the aggregate labour productivity was stagnant during the 1980s....

The purpose of this paper is to track the development process in Egypt since the early sixties. The paper starts with the broad definition of the development and its goals, then it evolves to the stages of development in Egypt since the first five years plan (1960-1965) passing by the open door...