What is Kuznets curve theory?

Kuznets curve theory hypothesizes that industrializing nations experience a rise and subsequent decline in income inequality. As per Kuznets curve theory economic growth initially leads to greater inequality, followed later by the reduction of inequality. You can read about the Kuznets Curve – Explanation of the Kuznets curve, its Criticisms in the given link.

The inequality tends to be temporary as workers and investors who were initially left behind soon catch up.

Further readings:

  1. Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes]
  2. Indian Economy Notes For UPSC Exam [Download PDFs]

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