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MENTAL MODEL · M3267

Kuznets Curve

Kuznets Curve
BusinessHigh supportDevelopment Economics
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

A hypothesis proposed by Simon Kuznets, suggesting that income inequality follows an inverted U-shaped pattern during economic development: relatively equal at low-income stages, increasing with industrialization, and then decreasing after reaching high-income levels.

SCAFFOLDING EFFECT

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Identifying characteristics of development stages. It provides a theoretical framework for understanding changes in income distribution during development. In policy-making, it helps judge the rationality of current development stages and inequality changes, but also reminds not to treat it as an inevitable law and neglect the necessity of policy intervention.

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The Kuznets curve hypothesizes that income inequality first widens and then narrows with economic development, forming an inverted U shape: early industrialization widens the gap, while later redistribution and human capital improvement narrow it. It depicts the trade-off between growth and inequality.

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Kuznets_curveZH · Explicit
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