Economic inequality is now recognised as a major problem in many economies, including regional economies (Arestis at al., 2011; Milanovic, 2017). Although global inequality, as measured by the Gini coefficient on real incomes, has generally fallen over the last few decades, this is largely due to the rapid increases in incomes in China and other newly industrialised countries. Within country inequalities have generally increased, especially for the very rich compared to others.
The causes are many, and are inter-related. They include deregulation, reductions in high rates of taxation, financialisation (both international and national), tax avoidance (IMF, 2019), rent-seeking by the rich, as well as being an intrinsic feature of capitalism (Piketty, 2014) where nominal wealth grows faster than nominal income.
The effects are mostly deleterious for society and the economy (Wilkinson and Pickett, 2009). Proposed solutions are wealth taxes (Wolff, 2017), higher top-rate income taxes, reform of the taxation of international corporations on to a country-by-country basis, a financial transactions tax, and re-regulation.
James Galbraith’s Inequality Project
“Importance of tackling income inequality and relevant economic policies” – Arestis, 2018
“Productivity and inequality in the UK: a political economy perspective” – Arestis, 2020
“UK and other advanced economies productivity and income inequality” – Arestis, 2020
Arestis, P., Martin, R. and Tyler, P. (2011) The persistence of inequality? Cambridge Journal of Regions, Economy and Society, 4, 3-11. DOI:doi:10.1093/cjres/rsr001.
Wilkinson, R. G. and Pickett, K. (2009) The spirit level: why more equal societies almost always do better, London: Allen Lane. ISBN: 9781846140396. Available on Research Gate.
Piketty, T. (2014) Capital in the Twenty-First Century, Belknap Press, ISBN: 067443000X. Available on De Gruyter.
Milanovic, B. (2016) Global Inequality: A New Approach for the Age of Globalization, Harvard University Press, Cambridge, MA. Available on Springer.
Wolff, E. N. (2017) A Century of Wealth in America, Belknap Press, ISBN: 9780674495142. Available on Google Books.
International Monetary Fund (2019) Finance and Development: Hidden Corners of the Global Economy, IMF Publications.