Bastobota without reality chara

Initially, growth was achieved along with equity for somw countries. Equity itself stimulated further growth and growth further enhanced equity by facilitating broad-based human capital formation which will make human capital further stimulated growth and this way the circle continued. When the economy is growing rapidly, the demand for education rises because people realize that there will be enough opportunity to make use of their education. Supply of education also rises, because rapid growth enables governments as well as private entrepreneurs to find more resources for education. So, growth stimulates further human capital formation, which in turn helps to achieve rapid growth with equity; and thus the circle continues.

Empirical evidence shows that countries which have a more equal distribution of income at the initial stage tend to grow faster (Birdsall and Sabot 1995). As the countries have equality, more people will send their children to school. This will result in better health care and better education. And for these effects, portion of human capital will rise and it will lead to more growth. This will act as a circle.

(2003)