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Monday, February 12, 2007

"Yes, Virginia, Income Inequality is Still Rising"

At Cato Unbound, there is a debate over whether income inequality has been increasing in recent years. The question is whether Alan Reynolds is correct when he claims that widening inequality is a myth, or whether he is quickly becoming the James Inhofe of the inequality debate.

The first essay is by Alan Reynolds. It's called Income Distribution Heresies. It is followed by an effective response from Gary Burtless, Ben Bernanke is Right.

Next up is, well, me:

"Yes, Virginia, Income Inequality is Still Rising", by Mark Thoma, Reaction Essay, Cato Unbound: In his response to Alan Reynolds, Mark Thoma invites us to "step back" and survey the wider picture of data and expert opinion on income inequality. The verdict? Fed Chairman Ben Bernanke, and the consensus generally, has got this one right. "The preponderance of evidence and of professional opinion," writes Thoma, "clearly indicates that inequality has been rising since [at least] 1988." Like Burtless, Thoma finds little in Reynolds’ analysis to agree with, describing his main points as "either too inconsequential to change the inequality picture," suffering from "an incomplete presentation of the evidence, or rebutted by other work." Thoma then goes a step further, pointing to new evidence suggesting that income inequality might be even greater than currently estimated.

Read: "Yes, Virginia, Income Inequality is Still Rising"

There will be subsequent rounds as well as additional contributors. I'll keep you "posted."

    Posted by on Monday, February 12, 2007 at 12:33 AM in Economics, Income Distribution | Permalink  TrackBack (1)  Comments (55)

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