Rising degrees of inequality originate from multiple reasons, including an emerging display out-of capital in total earnings too as grows from inside the money inequality, rural-urban and regional variations, technical alter, trading and you will financial liberalization, privatization, tax policies and change for the labor industry associations. sixty It’s clear that the brand new monetary concept is required to explicate the latest dating anywhere between such products hence new empirical lookup must measure their words in various regions and you will lower than more situations.
Barro alludes to five broad categories of economic concept that happen to be developed to assess the fresh new macroeconomic relations ranging from inequality and you may economic gains. As he notices, all these theories possess offsetting outcomes that lead to help you confusing results. Based on their empirical research, Barro figured income-equalizing policies is justified towards growth venture basis inside terrible nations, but not necessarily much more prosperous regions. 61