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This chapter examines whether rising income inequality is the stylised fact for the process of structural transformation by revisiting classical accounts on various theories of normative inequality dynamics, modernisation, and endogenous growth. In addition, a complex interaction between transformational process and income inequality is analysed by exploring the multidimensions of inequality dynamics, including social, economic, political, and moral. This critical review allows us to conclude that rising income inequality is far from inevitable by introducing a proposal for what it calls Augmented Inequality Dynamics which attempts to systematise the endogenous process within a society, underpinned by these multidimensional aspects. Once the inequality dynamics are formed as historically driven systems of social, economic, and political relations that frame the regulation and coordination mechanism that governs a society, the dynamics can be so evolutionary in a way that they structurally transform themselves by interacting with various dimensions and institutions to shape their own pathway. This explains how income inequality is used to incentivise or restrain the process of various societal interactions by itself going Up and Down repeatedly in the context of structural transformation.
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- Theoretical Reshaping for the Augmented Inequality Dynamics
Seung Jin Baek
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