Development and Economic Inequality

Inequality in China - INET Hong Kong

Breakout panel on "Inequality in China" at the Institute for New Economic Thinking's "Changing of the Guard?" conference in Hong Kong. Featured panelists Albert Park, Scott Rozelle, Dali Yang, Junsen Zhang, and INET Grantee Steven Durlauf.

In this video: 
Steven Durlauf

Statistical Physics Approach to Income and Wealth Distribution

Project Leader: 
Victor Yakovenko

This project deals with income and wealth inequality, financial instability, and the distribution of energy consumption around the world.  It is guided by ideas from statistical physics, such as spontaneous development of wide distributions in an ensemble of initially equal agents.  Maximization of entropy in partitioning of a limited resource among many agents leads to the wide exponential distributions, often confirmed by empirical data.  The research will focus on mathematical modeling of the two-class structure of income distribution (1% vs. 99%) and the effect of growing inequality on dynamics of money flow in the system.

Income Inequality, Household Debt, and Current Account Imbalances

Project Leader: 
Till van Treeck
Project Members: 
Christian Belabed
Jan Behringer
Thomas Theobald

There is growing concern among economists that rising income inequality can contribute to the generation of financial crises and to macroeconomic instability more generally. In particular, it has been argued that rising inequality has contributed not only to the increase in household debt and the current account deficit in the United States but also to the overly export-dependent growth models of countries like China and Germany. This project will analyze the country-specific effects of inequality within a stock-flow consistent (SFC) macro model and within a DSGE model with heterogeneous and interacting households. The calibration of the model will be guided by an in-depth analysis of household and company survey data and national institutions. Read more

Does Financialization Contribute to Growing Income Inequality?

Project Leader: 
Donald Tomaskovic-Devey
Project Members: 
Ken-Hou Lin

The financialization of the US economy and rising income inequalities are two of the most profound economic developments of the last fifty years. In this project we ask if the financialization of the US economy has contributed to rising income inequality.  We propose to answer this question with complementary analyses at the individual, firm and industry levels.  We focus on three components of the earnings distribution: employment earnings distributions, executive compensation, and capital/labor shares of value added. For firms we also examine the consequences of financialization for global and domestic employment and for domestic employment separately for various occupational groups.

Rising Inequality as a Structural Cause of the Financial and Economic Crisis

Project Leader: 
Engelbert Stockhammer

The financial crisis that began in summer 2007 has turned into the worst economic crisis since the Great Depression. Its causes are usually sought in the malfunctioning of the financial sector. Non-financial factors often receive less attention. One of the major socio-economic changes of recent decades has been a dramatic shift in income distribution. The project investigates whether rising inequality has contributed to the macroeconomic imbalances that erupted in the present crisis. This is done based on a Kaleckian macroeconomic model. This project suggests that the present crisis should be understood as an outcome of the interaction of the process of financial deregulation with the effects of the polarization of income distribution. Read more

The Significance of Inequality

Project Leader: 
Martin O'Neill

Economics and political philosophy are both concerned with questions of distributive justice, and both disciplines have made significant breakthroughs in understanding problems of inequality. Nevertheless, each discipline pays scant attention to the insights of the other. This project will show what economists can learn from political philosophers in thinking about economic inequality while also investigating the philosophical significance of recent empirical work on inequality, within economics and elsewhere. Each discipline can be significantly enriched by the insights of the other in understanding the significance of inequality.

Economic Inequality and Sustainable Transportation Policy

Project Leader: 
Kathryn Neckerman
Project Members: 
Daniel Sheehan

This project will examine how the spatial pattern of inequality in U.S. cities shapes the provision of public transit and – more broadly – the prospects for a more equitable and sustainable transportation policy. This mixed-methods project uses Census data for 1970-2007 linked to a national transit database, as well as documentary information on public debates over transit, and asks: (1) does the return of affluent residents to central cities promote investment in transit? (2) does economic segregation exclude low-income residents from the benefits of these new investments? and (3) does co-location of affluent and low-income residents lead to cross-class coalitions for transit?

The Measurement and Assessment of Inequalities on a World Scale

Project Leader: 
James K. Galbraith
Project Members: 
Wenjie Zhang

This project will extend the work of the University of Texas Inequality Project, permitting new data development and research in two technical and at least three substantive areas. The technical projects are: (1) updating the core global inequality data-sets from 2000 through the Great Financial Crisis; (2) GIS mapping of changing inequalities using global and national data.  The substantive projects include: (1) assessment of the effects of financial crisis on inequality;  (2)  inequality and demographic factors, including health, life expectancy and fertility; and (3) a comparative assessment of social, political and financial factors that reduce and increase inequality.

Azim Premji Summer School

Azim Premji University and the Institute for New Economic Thinking (INET) ran their first Advanced Graduate Workshop in Indian Development from July 9-15, 2012. The workshop was open to advanced Ph.D. social science students in any Indian university and explored critical debates in Indian economic development. The workshop was devoted to identifying the complex interactions that have influenced India’s trajectory of development and to conceive of development strategies that might be successful in promoting equitable growth, building workforce capabilities, and reducing poverty. Read more

Robert and Edward Skidelsky -The Good Life & Noneconomic Innovation 2/3

In the second part of this three-part INET "From the Director's Chair" interview, INET Executive Director Robert Johnson talks with Robert Skidelsky and his son Edward Skidelsky about their book, How Much is Enough? Money and the Good Life. Read more