The effect of initial income inequality on growth is the subject of a large literature. We show, both analytically and … with simulation experiments, that the same level of initial income inequality can be associated with very different income … developments, depending on the source of the inequality. We consider three sources: differences in asset ownership, in productivity …

effect and a neglect of education. …

's future income proportionally at all levels of education, leaving the relative return between quality and quantity unaffected …. This result is consistent with historical evidence that longevity began to increase long before education did. Our theory … also casts doubts on recent findings about a positive effect of health on education. This is because health raises the …