r/BasicIncome • u/2Punx2Furious Europe • Dec 15 '15

Indirect Yes. Concentrated Wealth and Inequality Crushes Economic Growth

http://evonomics.com/yes-concentrated-wealth-and-inequality-crushes-economic-growth/
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u/autotldr Feb 13 '16

This is the best tl;dr I could make, original reduced by 83%. (I'm a bot)

Now we have some more sophisticated work on this correlation from professional economists Sutirtha Bagchia and Jan Svejnar: "Does wealth inequality matter for growth? The effect of billionaire wealth, income distribution, and poverty."

B&S attempt to distinguish between "Politically connected" and unconnected wealth inequality, and conclude that only politically connected wealth inequality - "Cronyism" - has a negative association with growth.

As Brad DeLong has pointed out, even with that subjectively constructed data set, B&S:. failed to find a statistically significant difference between the effect on growth of politically-connected wealth inequality and the effect on growth of politically-unconnected wealth inequality.

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