Macroeconomic research discusses credit market imperfections as a key channel through which inequality retards growth. Limited borrowing prevents the less affluent individuals from investing the efficient amount, and the inefficiencies are considered to become stronger as inequality rises. This paper, though, argues that higher inequality may actually boost aggregate output...
This paper presents and then tests a political economy model to analyze the observed positive relationship between income inequality and inflation. The model's key features are unequal access to both inflation-hedging opportunities and the political process. The model predicts that inequality and 'elite bias' in the political system interact to...
Macroeconomic research discusses credit market imperfections as a key channel through which inequality retards growth. Limited borrowing prevents the less affluent individuals from investing the efficient amount, and the inefficiencies are considered to become stronger as inequality rises. This paper, though, argues that higher inequality may actually boost aggregate output...
In a choice between equal payoffs and more lucrative but disadvantageously unequal payoffs, individuals willingly trade disadvantageous inequality for extra profit, choosing the more lucrative but disadvantageously unequal payoff. The present analysis, however, explores how the transaction utility, the perceived value of such "Deals," depends on whether allocation recipients come...
Income inequality is one of the most analytically complex, value-laden, contentious subjects of economic policy. How should income be measured? How should inequality be measured? How much has inequality changed in recent decades, and what explains the changes? What effect did changes in tax policy have on after-tax inequality? This...
This paper examines the interactions between Foreign Direct Investment FDI, inequality, and growth, both from an empirical and a theoretical point of view. Using a panel of 119 developing countries, it is observed that FDI promotes both inequality and growth, and tends to reduce the share of agriculture to GDP...
The paper analyzes general equilibrium relationships between trade policy and the household distribution of income, decomposing social welfare into real income level and variance components and emphasizing Gini and Atkinson indexes. They embed these inequality-adjusted social welfare functions in a general equilibrium structure mapping from tariff protection to household inequality....
Unequal geographical distribution of medical care resources and insufficient healthcare coverage has been two long-standing problems with Taiwan's public health system. The implementation of National Health Insurance NHI attempted to mitigate the inequality in health care use. This study examines the degree to which Taiwan's National Health Insurance NHI has...
To what degree should societies allow inequality to be inherited? What role should estate taxation play in shaping the intergenerational transmission of welfare? This paper explores these questions by modeling altruistically linked individuals who experience privately observed taste or productivity shocks. The positive economy is identical to models with infinite-lived...
The author studies a heterogeneous agent's economy which is calibrated to mimic the business cycle behavior of the US income distribution. Agents face aggregate and idiosyncratic risk, issue collateralized and uncollateralized debt, work and accumulate assets over time. He investigates whether the model can replicate two empirical facts: the large...
Has U.S. health care for the elderly become more equitable during the past several decades? We suggest a new approach to measuring inequality: the use of quality-based effective care measures. For these measures, efficacy is well proven and nearly all of the relevant population should be receiving it, regardless of...
This paper shows that inequality is an important determinant of import demand, in that it augments the standard gravity model in a significant way. It interprets this result with the aid of a model in which tastes are non-homothetic. Classification of products, based on the correlation between household budget shares...
This paper presets health inequalities across socio-economic groups in the US, which are large and have been growing. The paper hypothesizes that, as in other, non-health contexts, this pattern occurs because people that are more educated are better able to take advantage of technological advances in medicine than are the...
From the executive summary: ‘Wealth and income inequality have increased dramatically over the past few decades. Growing inequality has negative consequences for sense of community. It contributes to the marked decline in generalized trust, social capital, and civic engagement over the same time period. And, an economy characterized by free-ranging,...
This presentation highlights the inequality of public-private competitions. Today, there is no real incentive to save a nickel. A lot is riding on this decision that if [the Services] step forward to find innovative ways to save money and increase efficiency, it will be a waste of time and work....
From the perspective of parents, redistributive taxation can be seen as social insurance for their children, for which no private alternative exists. Because private insurance comes too late during a person's life, it cannot cover the same risks as social insurance. Empirically, 85% of social insurance covers risks for which...
The United States of America is becoming less united by the day. A 30-year gap now exists in the average life expectancy between Mississippi, in the Deep South, and Connecticut, in prosperous New England. Huge disparities have also opened up in income, health and education depending on where people live...
JOHANNESBURG AFP — The persistent high rate of unemployment is the weakest point in South Africa's post-apartheid economy, with the education system failing to produce skilled workers, the OECD said on Tuesday. In a report unveiled in the financial capital Johannesburg, the Organisation for Economic Cooperation and Development...
JOHANNESBURG AFP — A persistently high rate of unemployment is the weakest point in South Africa's post-apartheid economy, with the education system failing to produce skilled workers, the OECD said on Tuesday. In a report unveiled in the financial capital Johannesburg, the Organisation for Economic Cooperation and Development...
WASHINGTON AFP — White House hopeful Barack Obama took aim at critics of his tough-love approach to African-American social issues Monday, telling a mostly black audience that he is going to keep talking about "this responsibility stuff." In a speech to the National Association for the Advancement of...
