This paper analyzes the role of income distribution in macroeonomic analysis. The study demonstrates that the long-run equilibrium depends on the initial distribution of income. In accordance with empirical evidence concerning the correlation between income distribution and output, an economy...

Conventional wisdom about the relationship between income distribution and economic development has been subjected to dramatic transformations in the past century. While Classical economists advanced the hypothesis that inequality is beneficial for economic development, the Neoclassical...