I. Introduction
Income inequality has been a major concern in development and welfare economics for more than a century. Kuznets (1955) suggests an influential hypothesis that income inequality should follow an inverse-U shape along the development process. Since then, assessing the relationship between economic growth and income inequality has long been an active topic. However, the effects of income inequality on economic growth are still controversial that requires both theoretical and empirical dedication (Aghion et al. (1999), Benabou (1996b), Barro (2000)).
