I was reading about the debate about income inequality and I would like to know your opinion on the matter.
Basically, the positions are two: the classical one, which states that inequality is good for growth because it fosters innovation and investments and the most recent one, the one of IMF and OECD, which states that inequality causes a decrease in human capital investment among lower-income households, which prevent them to become earners or consumers in the future.
I read that both are supported by empirical evidence but there is skepticism about them (e.g. Chris Giles on FT).
What's your idea on the topic? Do you have any suggestion about literature/articles I can read about it?