Summers' Theorem

Summers’ Theorem states that boosting economic growth alone does not necessarily lead to a proportional increase in income inequality. In other words, policies aimed solely at stimulating growth may benefit all income groups, not just the wealthiest. The theorem highlights the importance of considering how growth is distributed across society, suggesting that growth and inequality are related but separate issues. To effectively reduce inequality, targeted policies beyond just promoting growth are often needed, as growth alone may not automatically benefit lower-income populations.