[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/urb/journl/v1y2015p1-19.html
   My bibliography  Save this article

What to do about income inequality

Author

Listed:
  • Sebastiano Fadda

    (Professore Ordinario di Economia Politica, Facoltà di Economia, Università Roma Tre)

Abstract
The first question dealt with in the paper is whether it’s worth worrying about unequal income distribution. The supposed long run constant factor shares, the positive effects of inequality and the greater importance of absolute level of income compared to its unequal distribution seems to deny this need. On the contrary, economic, social and fairness reasons support the need to care about unequal income distribution. Therefore, measures should be taken about income inequality, and a distinction has to be made between measures to prevent excessive inequality from happening and measures to redistribute income once inequality has taken place. In order to envisage appropriate measures it is necessary to find out what causes the growing trend of increasing inequality in income distribution: economic and institutional factors are taken into consideration. Consequently a range of measures are suggested, which go from reducing the “degree of monopoly†in the economy to regulating the financial system, from improving the system of collective bargaining to curbing the “predatory behaviour†of the executives. Redistribution measures are also discussed, with a warning about the risk of causing with them more harm than the inequality they are supposed to counteract.

Suggested Citation

  • Sebastiano Fadda, 2015. "What to do about income inequality," Argomenti, University of Urbino Carlo Bo, Department of Economics, Society & Politics, vol. 1(1), pages 1-19, May-Augus.
    • Handle: RePEc:urb:journl:v:1:y:2015:p:1-19
    DOI: 10.14276/1971-8357.469
    as

    Download full text from publisher

    File URL: http://www.econ.uniurb.it/RePEc/urb/journl/469-1822-1-PB.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.14276/1971-8357.469?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrew G. Berg & Jonathan D. Ostry, 2017. "Inequality and Unsustainable Growth: Two Sides of the Same Coin?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 792-815, November.
    2. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(4), pages 1001-1026.
    3. Berg, Andrew & Ostry, Jonathan D. & Zettelmeyer, Jeromin, 2012. "What makes growth sustained?," Journal of Development Economics, Elsevier, vol. 98(2), pages 149-166.
    4. Andrew G. Berg & Jonathan D. Ostry, 2017. "Inequality and Unsustainable Growth: Two Sides of the Same Coin?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 792-815, November.
    5. Jean-Paul Fitoussi & Francesco Saraceno, 2011. "Inequality, the Crisis and After," Rivista di Politica Economica, SIPI Spa, issue 1, pages 9-27, January-M.
    6. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    7. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    8. Davies, James B. & Sandstrom, Susanna & Shorrocks, Anthony & Wolff, Edward N., 2006. "The World Distribution of Household Wealth," Conference papers 331490, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    10. Salverda, Wiemer & Nolan, Brian & Checchi, Daniele & Marx, Ive & McKnight, Abigail & Toth, Istvan Gy (ed.), 2014. "Changing Inequalities in Rich Countries: Analytical and Comparative Perspectives," OUP Catalogue, Oxford University Press, number 9780199687435.
    11. Thomas I. Palley, 2013. "Financialization: What It Is and Why It Matters," Palgrave Macmillan Books, in: Financialization, chapter 2, pages 17-40, Palgrave Macmillan.
    12. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 719-741, September.
    13. Galbraith, James K., 2012. "Inequality and Instability: A Study of the World Economy Just Before the Great Crisis," OUP Catalogue, Oxford University Press, number 9780199855650.
    14. Pasquale Tridico, 2014. "Produttività, contrattazione e salario di risultato: un confronto tra l'Italia e il resto d'Europa," Economia & lavoro, Carocci editore, issue 2, pages 147-170.
    15. Chen Wang & Kees Goudswaard & Koen Caminada, 2012. "Disentangling Income Inequality and the Redistributive Effect of Taxes and Transfers in 20 LIS Countries Over Time Evidence from the LIS Data," LIS Working papers 581, LIS Cross-National Data Center in Luxembourg.
    16. Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2012. "Disentangling income inequality and the redistributive effect of taxes and transfers in 20 LIS countries over time," MPRA Paper 42350, University Library of Munich, Germany.
    17. Eckhard Hein & Torsten Niechoj & Heinz-Peter Spahn & Achim Truger (ed.), 2008. "Finance-led Capitalism? Macroeconomic Effects of Changes in the Financial Sector," Conference proceedings of the Research Network Macroeconomics and Macroeconomic Policies (FMM), IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, volume 11, number 11-2008, December.
    18. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    19. Mr. Jonathan David Ostry & Mr. Andrew Berg & Mr. Charalambos G Tsangarides, 2014. "Redistribution, Inequality, and Growth," IMF Staff Discussion Notes 2014/002, International Monetary Fund.
    20. Timothy M. Smeeding & Jeffrey P. Thompson, 2011. "Recent Trends in Income Inequality," Research in Labor Economics, in: Who Loses in the Downturn? Economic Crisis, Employment and Income Distribution, pages 1-50, Emerald Group Publishing Limited.
    21. Raghuram G. Rajan, 2010. "Fault Lines: How Hidden Fractures Still Threaten the World Economy," Economics Books, Princeton University Press, edition 1, number 9111.
    22. Mats Johansson & Bjorn Gustafsson, 1997. "In Search for a Smoking Gun: What Makes Income Inequality Vary Over Time in Different Countries?," LIS Working papers 172, LIS Cross-National Data Center in Luxembourg.
    23. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    24. Jonathan David Ostry & Andrew Berg & Charalambos G Tsangarides, 2014. "Redistribution, Inequality, and Growth," IMF Staff Discussion Notes 14/02, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrew Berg & Jonathan D. Ostry & Charalambos G. Tsangarides & Yorbol Yakhshilikov, 2018. "Redistribution, inequality, and growth: new evidence," Journal of Economic Growth, Springer, vol. 23(3), pages 259-305, September.
    2. Sebastiano Fadda, "undated". "Income Inequality. What Causes It And How To Curb It," Working Papers 0014, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    3. Jonathan D. Ostry & Andrew Berg & Charalambos G. Tsangarides, 2014. "Redistribución, desigualdad y crecimiento," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 16(30), pages 53-81, January-J.
    4. Andros Kourtellos & Charalambos G. Tsangarides, 2022. "Robust Correlates of Growth Spells: Do Inequality and Redistribution Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(6), pages 1302-1328, December.
    5. Nicholas Apergis & Christina Christou & Rangan Gupta & Stephen M. Miller, 2015. "Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology across the U.S. States," Working Papers 201539, University of Pretoria, Department of Economics.
    6. Sungmun Choi, 2019. "Is the Current Trend of Income Inequality Sustainable?," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    7. Voinea, L. & Lovin, H. & Cojocaru, A., 2018. "The impact of inequality on the transmission of monetary policy," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 236-250.
    8. Sudip Ranjan Basu, 2017. "Do data show divergence? Revisiting global income inequality trends," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(1), pages 23-53, June.
    9. Andrew G. Berg & Jonathan D. Ostry, 2017. "Inequality and Unsustainable Growth: Two Sides of the Same Coin?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 792-815, November.
    10. Mcknight, Abigail, 2019. "Understanding the relationship between poverty, inequality and growth: a review of existing evidence," LSE Research Online Documents on Economics 103458, London School of Economics and Political Science, LSE Library.
    11. Jochen Hartwig, 2018. "Wachstumsfolgen von Einkommensungleichheit – Theorie, empirische Evidenz und Politikempfehlungen," Chemnitz Economic Papers 020, Department of Economics, Chemnitz University of Technology.
    12. Abigail McKnight, 2019. "Understanding the relationship between poverty, inequality and growth: a review of existing evidence," CASE Papers /216, Centre for Analysis of Social Exclusion, LSE.
    13. Serhan Cevik & Carolina Correa‐Caro, 2020. "Taking down the wall: Transition and inequality," Review of Development Economics, Wiley Blackwell, vol. 24(1), pages 238-253, February.
    14. Cerra,Valerie & Lama,Ruy & Loayza,Norman V., 2021. "Links between Growth, Inequality, and Poverty : A Survey," Policy Research Working Paper Series 9603, The World Bank.
    15. Bagchi, Sutirtha & Svejnar, Jan, 2015. "Does wealth inequality matter for growth? The effect of billionaire wealth, income distribution, and poverty," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 505-530.
    16. Nauro F. Campos & Paul De Grauwe & Yuemei Ji, 2017. "Structural Reforms, Growth and Inequality: An Overview of Theory, Measurement and Evidence," CESifo Working Paper Series 6812, CESifo.
    17. Nicholas Apergis & Christina Christou & Rangan Gupta & Stephen M. Miller, 2018. "Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology across States in the U.S," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(2), pages 147-161, May.
    18. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.
    19. repec:spo:wpmain:info:hdl:2441/gmkj8k1vf8tpbdue5q2emsepp is not listed on IDEAS
    20. Eckhard Hein & Daniel Detzer, 2015. "Finance-Dominated Capitalism and Income Distribution: A Kaleckian Perspective on the Case of Germany," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(2), pages 171-191, July.
    21. Sirine MNIF, 2017. "The Impact of Inequality on Growth Driven by Technological Changes: a Panel of Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 127-140, March.

    More about this item

    Keywords

    Income distribution; income inequality; redistribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:urb:journl:v:1:y:2015:p:1-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Carmela Nicoletti (email available below). General contact details of provider: https://edirc.repec.org/data/deurbit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.