On Tue, 16 May 1995, Jeff Oman wrote: > The sequence is as follows, more inequality reduces > >incentives to save (or to accumulate human capital) to the less > >favoured by the distribution. The amount of savings and human capital > >that is lost is not compensated by the savings and human capital of > >the rich ones. > > > You mean tinkle-down doesn't work? ; ) > Jeff Oman > > Exactly. What I found is that poor people becomes poorer in time, since most of their capital returns (wether physical or human) go, in fact, to rich people. The reason behind, I suppose and I am trying to prove, has to do with institutions, in that the stability they provide also generates inertia in the way income is distributed. MOst empirical evidence is closer to this approach than to trickle-down, but most theory (neoclassical theory) goes the other way. I think that if development theory can go anyway, this is it. Macario
