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Friday, April 22, 2011

"The Age of Unequals"

This was suggested by Nicolas Lepage-saucier via email, along with the following comments:

The increasing inequality in the US in recent years is hard to deny. But what should we make of it? Lucas (2004) thinks it is unimportant:

Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution...The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production.

Richard Wilkinson begs to differ. I haven't found a nice presentation of his book, but his presentation is quite interesting:

[the talk begins at the 5 minute mark.]

I don't question the correlations. But causation? I suspect there is an underlying common variable: More compassionate societies care to improve social outcomes and one of these is to reduce poverty at the bottom of the distribution.

I am also hesitant to conclude that the correlations are causal, but what do you think?

    Posted by on Friday, April 22, 2011 at 08:19 PM in Economics, Income Distribution | Permalink  Comments (51)


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