Abstract

Since the early 1990s income inequality has regained a central role in the current theoretical, applied and policy debate dominating the scene in the developed, developing and transition countries. In developed countries the diminishing labour share has become one of the main concern of Governments and a crucial variable in explaining a persistent sluggish growth rate. International Organisations see the persistence of mass poverty not only as a major ethical and political problem but also as a brake on long-term growth, since inequality may reduce economic efficiency and growth.