Weeks One - Six Flashcards
What is inequality?
The unequal distribution of something
Dimensions of inequality?
Wealth, Income, Power, Opportunity
How is inequality measured?
GINI - Gross National Income
What is PPP?
Purchasing Power Parity
What are Proportional Share Indices?
The income of the richest decile ratioed to the income of the poorest decile
Key points of Pickety and Saez (2014)?
Used World Top Income Database to map income distributions in US and Europe.
Wealth inequality greater in the US
Wealth-to-income holds a U-distribution
What is fiscal deregulation?
Removing rules surrounding income and tax
Wealth equation?
Wealth = Income - spending + inheritance + luck
From where is the GINI Coefficient derived?
The Lorenz curve - plots the richest x poorest cumulative income
What is perfect equality vs perfect inequality?
0 = Perfect GINI Equality, 1 = Perfect GINI Inequality
How is the GINI coefficient limited?
Entirely descriptive - tells us there is inequality but not why
What is Theil’s T+L?
Shows whether inequality is due to reasons within or between areas
What did Friedman believe about inequality?
It is inevitable and even desirable as a motivator
Inherited talent is as valuable as inherited wealth
What did Wilkinson and Pickett believe about inequality?
It can only be negative - “The Spirit Level” theory states that inequality erodes trust, promotes excess and increases anxiety in society
What does Branko Milanovic say about geographic inequality?
Luck and effort can change personal circumstances, but not overall inequality
Efforts need to be combined with overall country improval and migration to improve global income position of nations