4

There could be some complicated models where high inequality could have effect on efficiency - the research is inconclusive (or to be more precise almost non existent) on the matter. However, in Public Economics, depending on the selected welfare function (ralwsian, utilitarian, charitable conservative/libertarian etc.), inequality matters for optimal ...


3

My understanding is that Piketty uses the term "P90/P10" only to measure wage inequality and the term "C90/C10" for wages plus social charges. The underlying distributions are different, but they both measure the ratio of the 90th percentile to the 10th percentile.


3

Yes they are "gift" (or rather a stimulus), but not exclusively to the 0.1%. There's basically "trickle down" by inflating the M2 money supply, i.e. bank loans, which hopefully include loans to companies where the "average guys" work. So in theory, banks have more funds to lend, at a low rate of interest, encouraging households and businesses to borrow. [...


3

This is a Lorenz curve. The Gini coefficient is the area between 'equal wealth' and your chosen line, divided by all the area under the equal wealth curve. There are other illustrations online, for sure, which would explain this. The Wikipedia article is telling you that the actual distribution of income is not fully captured by the Gini coefficient. The ...


2

There are a couple of things here. First of all, envy is when your own payoff is smaller than the other player's payoff, which is the case when $z_i<z_j$. So the coefficients here are $0.8$ for envy and $0.4$ for compassion (envy looms larger). Solving the game using backward induction, we need to first find the minimum value that player 2 is willing to ...


2

There is a lot of research into this area. You might want to look into the papers of Angus Deaton, Thomas Picketty, Gabriel Zucman, Emanuel Saez or Branko Milanovic for starters. Especially, Emanuel Saez directly focuses on optimal taxation under different social preferences - including utilitarianism and ralwsianism where reducing inequality matters. ...


2

After substituting for $c_{1t}$ and $c_{2t}$, the problem can be rewritten as : \begin{eqnarray*} \max_{q_t^e} \ & \frac{(1- \pi) (n\omega_t)^{-\gamma} }{-\gamma} \left((1-q_t^e) + z_tq_t^e\right)^{-\gamma} + \frac{\pi (AR\theta\omega_t)^{-\gamma } }{-\gamma z_t^{ -\gamma }} \left((1-q_t^e) + z_tq_t^e\right)^{-\gamma} \\ \text{s.t. } & q_t^e \in [0,...


2

Kuznet talked about income inequality. In this context it is often measured by the Gini coefficient or the Kuznet ratio, but basically any measure of income inequality would do, since Kuznet's hypothesis is merely a qualitative one.


2

The Federal Reserve has two statistical programs that I believe might address your question. The first is the Survey of Consumer Finances (SCF) and the second is the Flow of Funds (FoF). You should be able to find the data on the Fed's website.


1

Wealthy individuals have invested most of their money. One of the biggest reasons for this is inflation. Most countries, especially those in the West, have a small, positive rate of inflation. Inflation is why a dollar when our grandparents were children was worth much more than a dollar is worth today. If the "rich" simply stored their money in their ...


1

Not sure what type of argument you are expecting. The Gini index is an area, so it is a statistic that loosely speaking is "adding" the heights of some values and normalizing it so that the higher the Gini, the higher the inequality. This is mathematically not too different from the average grade of a student in a class where you add up all the grades he/she/...


1

in relation to things people would be buying anyway, doesn't boycotting Black Friday just amount to paying full price (or finding other sales) at some other time of the year versus taking advantage of these sales? Yes. Regarding necessities or scheduled expenditures, participating in BND requires a time-shift in consumption that may carry a higher price ...


1

The argument is correct Social Mobility and Income Inequality are simply two distinct phenomenons. Mobility is arguably the more complex one, and there are many different ways to define it. As an example, absolute mobility refers to someone earning more income in absolute terms (\$ per year), while relative mobility refers to someone earning more in ...


1

The wayback machine has snapshots: https://web.archive.org/web/20120217010359/http://www.delta.ens.fr/XIX/


1

Economics cannot answer your question. Economics as a discipline discarded normative assumptions ("what is good?") in order to deal with issues around price. This was a sound academic decision (Hey bro, how much for your kidney, no seriously, how much for both your kidneys). As a result economics don't answer for "better" but for "more." There is another ...


Only top voted, non community-wiki answers of a minimum length are eligible