Posts tagged inequality
You do not create dynamic equality just by raising the level of those at the bottom, but rather by making the rich rotate –or by forcing people to incur the possibility of creating an opening. The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the one percent
Dynamic equality assumes Markov chain with no absorbing states
Our condition here is stronger than mere income mobility. Mobility means that someone can become rich. The no absorbing barrier condition means that someone who is rich should never be certain to stay rich.
Dynamic equality is what restores ergodicity, making time and ensemble probabilities substitutable
via https://medium.com/@nntaleb/inequality-and-skin-in-the-game-d8f00bc0cb46
Globalization was the driving force behind the growth miracle in emerging markets, lifting millions of people out of poverty over the past few decades. Now, a backlash against how the global income pie has been divided up is increasingly influencing the political affairs of developed markets. Globalization constituted a massive labor supply shock, allowing corporations to tap cheaper workers. The benefit to consumers in advanced economies took the form of downward price pressures on these goods. Along the way, however, the middle classes in developed nations failed to see this rising tide lift their boats. “The biggest losers (other than the very poorest 5 percent), or at least the ‘non-winners,’ of globalization were those between the 75th and 90th percentiles of the global income distribution whose real income gains were essentially nil,” according to Milanovic. “These people, who may be called a global upper-middle class, include many from former Communist countries and Latin America, as well as those citizens of rich countries whose incomes stagnated.” Toby Nangle, co-head of asset allocation at Columbia Threadneedle Asset Management, called this “globalization as an elephant” visual, “the most powerful chart of the last decade.”
via http://www.bloomberg.com/news/articles/2016–06–27/get-ready-to-see-this-globalization-elephant-chart-over-and-over-again
“What’s now captured the interest of intellectuals is the elephant chart, the idea that over the past 30 years the winners were emerging market middle classes and the 1 percent in developed markets, but the developed markets’ middle classes were stagnant,” he wrote. “And I think we’ve finally found the correct framework for thinking about intersection of politics and macroeconomic trends.”
http://www.bloomberg.com/news/articles/2016-06-27/get-ready-to-see-this-globalization-elephant-chart-over-and-over-again
Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment. The notion that fiscal consolidations can be expansionary (that is, raise output and employment), in part by raising private sector confidence and investment, has been championed by, among others, Harvard economist Alberto Alesina in the academic world and by former European Central Bank President Jean-Claude Trichet in the policy arena. However, in practice, episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1 percent of GDP increases the long-term unemployment rate by 0.6 percentage point and raises by 1.5 percent within five years the Gini measure of income inequality
via http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm
The Gini Coefficient, which can measure inequality in any set of numbers, has been in use for a century, but until recently it rarely left the halls of academia. Its one-number simplicity endeared it to political scientists and economists; its usual subject—economic inequality—made it popular with sociologists and policy makers. The Gini Coefficient has been the sort of workhorse metric that college freshmen learn about in survey courses and some PhD statisticians devote a lifetime to. It’s been so useful, so adaptable, that its strange history has survived only as a footnote: the coefficient was developed in 1912 by Corrado Gini, an Italian sociologist and statistician—who also wrote a paper called “The Scientific Basis of Fascism.”
http://www.psmag.com/magazines/january-february–2013/gini-coefficient-index-poverty-wealth-income-equality–51413/
