Abstract: This paper introduces the Pareto income distribution，hierarchic preferences，and homogeneous pr-oducts which inseparable from the utility of innovative products into the innovation－driven growth model，th-en studies the impacts of income disparity on economic growth through demand － induced innovation． The    theoretical model analyses the demand － induced innovation mechanism completely，in which the shape para-meter of Pareto income distribution directly determines the price effect and market scale effect of innovative pr-oducts． Numerical simulations find that，given the large income gap，market scale effect plays a leading role in demand－induced innovation，and a more even income distribution helps the economy to enter a higher gro-wth trajectory; for the established income distribution，adjusting the consumption structure of residents also has an impact on the economic growth rate and investment rate through demand－induced innovation; the Gini coe-fficient has a non-linear decreasing relationship withsocial utility，and excessive income disparity can cause serious welfare losses．This paper provides theoretical value and reference signification for expanding domestic   demand，upgrading both consumption and industry，and constructing a higher － level dynamic balance of     supply and demand．

Keywords: Income Distribution，Demand－induced Innovation，Price Effect，Market Scale Effect，

Economic Growth