There is a furious debate among economists about the relationship between equality (or inequality) and economic growth. Based on the observation that developing countries often experience increasing inequality during their initial periods of rapid growth, some economists emphasize the role of inequality in establishing incentives to work, save, and invest. The experience of the East Asian economies that grew rapidly after reducing their levels of inequality (through land reform and other means) led other economists to argue that greater equality leads to faster economic growth. The reasons they cite are numerous: more political stability, greater access to credit, higher levels of spending on education, and wider land ownership.

a. How do these arguments about the positive link between equality and economic growth fit with your textbook's list of the sources of economic growth?

b. What do you think is the relationship between equality (or inequality) and economic growth? (Radical)