Economics Posted: April 11th, 2014
Introduction
In this part, Explain what is income inequality and both positive and negative effect. Compare the affect on developed countries and developing countries. Since the topic is about income inequality and GDP growth, use the data from World Bank to make a coordinate system. X-axis would be gini index and y-axis would be GDP growth.
Three main points
What is the household income inequality of some group of countries affect on GDP growth?
1． There are two opinions: the first is income inequality promotes economic development and social progress. On the opposite the other is income inequality inhibits economic development.
2． According to the data of gini index from World Bank, the income inequality inhabits economic development after 1990s.
3． It’s dependent on the level of economic development of different countries. In poor countries, which are the developing countries income inequality inhabits economic development.
But in the developed countries the larger income gap they have, the faster GDP growth they will make. (Robert Barro’s Research)
The income inequality has a negative effect on GDP growth in China.
1. In China, with the GDP growth, income inequality also increases. Use a graph to explain.
2. Compare the specific differences. Such as income gap between urban and village, between executive and employee.
3. Income gap in different industries.
4. Negative effect on economy. For example, huge income gap impact social justices and social stability.
5. Affect economic structure and industrial structure, and then affects GDP growth. Talk about middle class, because the GDP growth depends on the size of the middle class in a country.
How to adjust household income and promote economic development
1. Shift from agricultural to nonagricultural
2. Improve population education
