Trading places: Does past growth impact inequality?

Using a broad panel dataset and semiparametric methods, the impact of past economic growth on current income inequality is examined. Increases in past short-run or medium-run growth rates raise current inequality. However, there is an inverted “U”-shaped relationship between past long-run growth and current inequality. Increases in past long-run growth rates raise current inequality in slow-growing economies and reduce current inequality in rapidly growing economies.