8. MLA/APA/AMA Citation: Szkely, M. (1999). Volatility: Children Pay the Price.

Latin
American Economic Policies, 8 (Third quarter): 3-4.
Source Validation: This book was written by an economist for the World Bank.
How did you find this source?: I found this source by looking at a source cited page of
another research paper on sustainable development.
Intended audience: This book is intended for an audience familiar with basic economics
concepts.
What arguments/topics does this source discuss?: This article points out that inequality
posits into the hands of smaller societal subsection a disproportionate amount of wealth. This
inequality invests that subsection with the ability to save, deposit, and grow wealth, thus
growing the economy by allocating resources to the production of goods that maximize
spending behaviors. Thus in the COlombian situation inequality is needed to the extent that
a) wealth is not being concentrated into the hands of those who are reluctant to save money
or invest in the local economy (drug lords) and b) relative inequality is continually reduced.
Also, the ability to direct sizeable sums of money to equally large investments can be linked
to economic growth.
Minimum 3 quotes, paraphrases, summaries of source text that seem likely to be
helpful in future writing:
...positing that growth in the early stages of development might cause
inequality.
The first is that a high level of saving, and resulting investment, is a prerequisite
of rapid growth, so that income must be concentrated in the hands of the rich, whose
marginal propensity to save is relatively high compared to that of the poor.
A related point is that large investments in infrastructure and industry are critical
to development; in the absence of a deep and well-functioning capital market, wealth
and income need to be concentrated to generate the necessary minimum resources.