The paper contributes to the literature of income inequality and economic growth in two directions. First, it analyzes the impact of income inequality on economic growth both through the supply of human capital and the incentive to invent induced by the demand for better quality goods. Secondly,...

Empirical evidence on the relationship between a country’s wealth inequality and economic growth is ambiguous. This paper provides reasonable explanations of this ambiguity. We investigate the implications which the shape of wealth distribution has for economic growth in a framework combining...