The Complex Nature of The Connection Between Economic Growth and Income Inequalities
Economic growth is one of the basic and most talked about phenomenon of economics, possibly because it aggregates the absolute expected future progress of a country into a simple, easily compareable number. However, progression and development are pretty complex concepts, and there is a growing consensus, that income inequalities should be seriously taken into consideration, when one is assessing the economic performance of a country or a region. Of course, when it comes to inequality, different approaches have somewhat different concerns, depending on what they identify as their key issue: poverty or inequality in general. This paper is trying to give an overview on the complicated connection between growth and inequalities in three main chapters. At first, I’m going to discuss the nature of income inequalities by presenting the most important income concepts, inequality shaping policies, inequality measurement techniques, and the present dispersion of income across countries, while giving a historical perspective on inequalities. Secondly, I will examine the phenomenons of poverty and wealth by applying a critical approach, especially for the role and the effect on inequalities of capital in modern economies. In the third chapter, I’m going to focus directly on the main topic, the effect of development and growth on the level of inequalities. Finally, I will summarize the conclusions and try to answer the main question of the topic: is it possible to reduce income inequality and boosting economic growth at the same time? Key words: social rights, institutionalized, welfare, social responsibility.
Key words - Labour income, Poverty, Household, Welfare distribution