INCOME INEQUALITY AND ECONOMIC GROWTH: A GLOBAL PERSPECTIVE

Abstract

This paper explores the intricate relationship between income inequality and economic growth from a global standpoint. While traditional economic theories suggest that some degree of inequality may incentivize investment and innovation, recent empirical studies indicate that excessive disparities can hinder long-term growth by limiting access to education, healthcare, and capital. This study synthesizes cross-country data and theoretical frameworks to examine how inequality affects growth trajectories in both developed and developing economies. It also evaluates the role of policy interventions, such as progressive taxation and social safety nets, in moderating inequality's adverse effects. The analysis reveals that sustainable economic development is more achievable when growth is inclusive and equitably distributed, suggesting the need for balanced policy frameworks that address both equity and efficiency.