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Lecture 10 - Inequality.pptx.pptx - Economic History...

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Economic HistoryInequalityUC3MLeonard Kukic[email protected]
Big issuesInequalityPeople do not gain equally from growth – relative winners and losersIs inequality related to growth?An outcome?A cause?The role of government policy and institutions
TodayGetting the facts rightTheoryGlobal inequality
TodayGetting the facts rightTheoryGlobal inequality
FactsWhat happened from the Roman Empire to today?The shocks/aftershocks of 2 world warsFinancial crises: 1929, 2008The rise (and decline?) of the welfare state, progressive taxation
Inequality in Europe since 7,000 BC
Wealth inequality reversal: US vs.Europe
Measuring inequalityRelative factor incomes:Skilled/unskilled labour (skill premium)Capital/labour ratioIncome and wealth shares: top 10% / 1% / .01%Gini coefficientsThese measures capture different aspects of inequality and are notnecessarily correlated
Inequality and history: sourcesHousehold budget surveysTax records (income tax)Population and GDP statistics
TodayGetting the facts rightTheoryGlobal Inequality
Is inequality a problem?Inequality as goodSignal of successful individuals and companiesMight motivate people to work harder (“keeping up with the Jones”)Richer individuals have a greatermarginal propensityto save and invest
Is inequality a problem?Inequality as badInequality is tightly related to social mobilityMight handicap human capital acquisitionCan be politically toxic

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