Kuznets’s Inverted-U Hypothesis
Simon Kuznets suggested that in the early stages of economic growth, the distribution of income will tend to worsen; only at later stages it will improve.22 This observation came to be characterized by the “inverted-U” Kuznets curve because a longitudinal (time-series) plot of changes in the distribution of income as measured, for example, by the Gini coefficientseemed, when per capita GNI expanded, to trace out an inverted U-shaped curve in some of the cases
Kuznets studied, as illustrated in Figure 5.10.