Not long ago I bumped into professor Zheng of the Korean National University (KNU). Four years ago when I taught at KNU, the professor of econometrics and I we were very close, and I was happy to have the opportunity to ask him about the economic problems facing Korea today. 

Korea is on the brink of a presidential election, says Zheng, and many Koreans are hoping that the government will change hands as early as possible. The current government is besieged on all fronts, and due to left-leaning economic policy, Korea's economy has disappointed many. Rising unemployment rates and a spike in housing prices have caused the complaints of average citizens to crescendo. 

What Professor Zheng calls left-leaning policy refers to an expansion of income distribution and re-distribution. When President Roh Moo-hyun's administration took the stage and started to honor income redistribution policy, it coincided with public opinion. Of course, if the relationship between income distribution and growth was simple and could be expressed clearly, policy would be as well. But for economists, the actual relationship between economic growth and income distribution is still unclear. If you search online for this, the number of results is staggering. Why is that? It's because the mutual causality is extremely complex, and with different economies, this relationship is manifested differently. Rarely do we see a large degree of economic growth that can fully protect fairness in income distribution.  

The earliest theory exploring the relationship between income inequality and growth is perhaps the most famous-- the Kuznets Curve, which looks like an upside-down U. Researchers have found it difficult to find the actualization of the Kuznets Curve, though oftentimes have discovered instead, and indeed some economies seem to only exhibit, one-half of the U. For many years, economists, at least statistically, have been unable to find one economy that completely exhibited a Kuznets Curve. Of course, for the overwhelming majority of developing countries, the ambiguity of "income" as well as how to more precisely measure income distribution gaps and trends, are exceedingly difficult questions being reserved for future discussion. 

How income distribution and redistribution relate to growth is seemingly simple but actually extremely complicated, and economists will not create direct relationships between them. A simple contrast of how economists view income distribution research and industry organization research is perhaps useful here. These two fields became popular at the same time, and the goals were both very clear. Both were spurred by policy and aimed at improving it. But we've discovered that there is now a greater consensus in the field industry organization research, regardless of whether it is based on developed or developing countries.