Economic inequality and economic growth

The paper enquires into the relationship between economic inequality and economic growth, but different from others, it also studies the relationship between inequality and economic growth in the situation where consideration of effect of factor movement is included. The paper tends to answer the questions such as whether inequality should be eradicated completely. Panel data models are used for the empirical study. Through the study, we aim to find out more clearly what are the effects of economic inequality on economic growth of the world, the developing countries, and the developed countries respectively, and what factors are helpful for economic growth and effectively cope with economic inequality.