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Finance & Development, September 2011 - Equality and Efficiency

Finance & Development, September 2011 - Equality and Efficiency
Finance & Development, September 2011, Vol. 48, No. 3 Andrew G. Berg and Jonathan D. Ostry PDF version Is there a trade-off between the two or do they go hand in hand? IN his influential 1975 book Equality and Efficiency: The Big Tradeoff, Arthur Okun argued that pursuing equality can reduce efficiency (the total output produced with given resources). Do societies inevitably face an invidious choice between efficient production and equitable wealth and income distribution? In a word, no. In recent work (Berg, Ostry, and Zettelmeyer, 2011; and Berg and Ostry, 2011), we discovered that when growth is looked at over the long term, the trade-off between efficiency and equality may not exist. Inequality matters for growth and other macroeconomic outcomes, in all corners of the globe. How do economies grow? The experiences in developing and emerging economies, however, are far more varied (see Chart 2). Income distribution and growth sustainability Hazard to sustained growth Cameroon is typical. Related:  TESIS GRIS SOCIAL DETERMINANTS HEALTH

Finance & Development, December 2010 - Leveraging Inequality Finance & Development, December 2010, Vol. 47, No. 4 Michael Kumhof and Romain Rancière PDF version Long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises THE United States experienced two major economic crises over the past 100 years—the Great Depression of 1929 and the Great Recession of 2007. Are these two facts connected? Shifting wealth We looked at the evolution of the share of total income controlled by the top 5 percent of U.S. households (ranked by income) compared with ratios of household debt to income in the periods preceding 1929 and 2007 (see Chart 1). In the more recent period (1983–2007), the difference between the consumption of the rich and that of the poor and middle class did not widen as much as the differences in incomes of these two groups. In other words, the increase in the ratios of debt to income shown in Chart 1 was concentrated among poor and middle-class households. Modeling the facts Policy options References

Europe’s Debt Crisis Has Become a German Identity Crisis “Germans, we don’t look to see what’s in our own national interest,” says Frank Schäffler. “We’re drunk with Europe.” Schäffler, a member of the Bundestag, Germany’s lower house of Parliament, is speaking on the phone from his home district of Bünde. The debt crisis in Europe has become a crisis of German identity. Schäffler is a member of the Free Democrats, a small party of what Americans would call libertarians, serving as the junior coalition partners to Angela Merkel’s much larger and more conservative Christian Democrats. Barely a year later, Greece is even closer to default, and Merkel is sending back a new treaty amendment that would replace the temporary “facility” with a permanent “mechanism”—a blueprint, in other words, for future bailouts. Among those who have lent their names to Schäffler’s pledge is Burkhard Hirsch, who represented the Free Democrats in the Bundestag over three decades, including four years as the body’s vice-president.

Finance & Development, September 2011 - Unequal = Indebted Finance & Development, September 2011, Vol. 48, No. 3 Michael Kumhof and Romain Rancière PDF version Higher income inequality in developed countries is associated with higher domestic and foreign indebtedness ECONOMISTS have long worried about the growing chasm between countries that borrow heavily internationally and those that dish out the loans. But there is another, domestic dimension to the pileup of international obligations. Why the United States has built such persistent and large deficits in its current account—which covers all noninvestment international transactions, including exports and imports, dividends and interest, and remittancese—is a matter of some debate. In current research we therefore extend the work reported in “Leveraging Inequality” (F&D, December 2010), which dealt with only the United States, to include an open-economy dimension. Modeling the facts An economic model can clearly illustrate these links between income inequality and current account deficits.

Wall Street’s Euthanasia of Industry Michael interviewed on Guns N Butter with Bonnie FaulknerListen here “When I was in Norway one of the Norwegian politicians sat next to me at a dinner and said, “You know, there’s one good thing that President Obama has done that we never anticipated in Europe. He’s shown the Europeans that we can never depend upon America again. There’s no president, no matter how good he sounds, no matter what he promises, we’re never again going to believe the patter talk of an American President. Mr. Topics: The jobless recovery; the debt ceiling and default charade; China; Greece: banks, not countries, receive the bailouts; financial warfare; IMF and EU; European Central Bank; US credit default swaps; US agricultural exports create food dependency; currency devaluation devalues the price of labor; class war of banks against the rest of society. I’m Bonnie Faulkner. That’s why the stock market is down 160 points today. Somebody has to lose when loans go bad. This is happening throughout the world.

Free exchange: All men are created unequal INEQUALITY is one of the most controversial attributes of capitalism. Early in the industrial revolution stagnant wages and concentrated wealth led David Ricardo and Karl Marx to question capitalism’s sustainability. Twentieth-century economists lost interest in distributional issues amid the “Great Compression” that followed the second world war. But a modern surge in inequality has new economists wondering, as Marx and Ricardo did, which forces may be stopping the fruits of capitalism from being more widely distributed. “Capital in the Twenty-First Century” by Thomas Piketty, an economist at the Paris School of Economics, is an authoritative guide to the question. The book suggests that some 20th-century conventional wisdom was badly wrong. The centrepiece of Mr Piketty’s analysis is the ratio of an economy’s capital (or equivalently, its wealth) to its annual output. Pre-1914 economies were very unequal. Victorian values

Riad Marrakech, Location Riad Marrakech, Riads Marrakech, Riad Maroc Hotel Maroc Desigualdad, ¿El problema social de los próximos años? - Econstuff | Econstuff Durante los últimos días la econosfera ha puesto el foco en la desigualdad, un tema de creciente interés tanto por su relación con la actividad económica como por el problema social que representa, en un momento en el que parece que dejamos una crisis económica atrás mientras la crisis social permanece como una parte cada vez más relevante de la nueva realidad que se está gestando. Ya en la reunión que tuvo Janet Yellen con los senadores, un tema recurrente por parte de estos fue preguntarle sobre la desigualdad y lo que se podía hacer para solucionar un problema que a veces no se remedia únicamente con aumentos continuados del PIB. Janet Yellen (1): This is a very serious problem, it’s not a new problem, it’s a problem that really goes back to the 1980s, in which we have seen a huge rise in income inequality En el anterior gráfico podemos ver la evolución de dos ratios para el caso Español. Fuente: Inequality from generation to generation: the United States in Comparison

Human Development Reports | United Nations Development Programme IMF: Income inequality is terrible for economic growth As the Occupy Wall Street protests swell in size and people pay closer attention to the gap between the wealthiest Americans and everyone else, one question is why this divide even matters. One way to look at income inequality, after all, is that it’s no big deal. If a country is growing at a healthy clip and everyone is steadily getting richer, then it’s hardly an outrage that a few titans at the very top are doing freakishly well, right? But a recent study from the International Monetary Fund suggests that this conventional view is misguided. In the IMF’s Finance & Development magazine, the authors, Andrew Berg and Jonathan Ostry, summarize their recent research (see also Josh Harkinson’s piece for Mother Jones). For sustained growth to occur, Berg and Ostry found, the most important factors are a relatively equal income distribution and trade openness. Why would inequality be so crushing for a country’s economy? Do these lessons apply to the United States?

07300.pdf Is inequality bad for economic growth? - The Washington Post On Wednesday, just as President Obama was giving his big speech on inequality and the economy, the Center for American Progress, a liberal think tank, released three new papers on this very topic. U.S. one dollar bills are arranged for a photograph in London on Wednesday, Feb. 23, 2011. (Chris Ratcliffe - BLOOMBERG) Perhaps the most interesting paper here is economist Jared Bernstein's exploration (pdf) of whether rising income inequality in the United States is bad for economic growth. His conclusion: There are compelling reasons to believe that inequality can harm growth, but it's surprisingly difficult to prove this is happening. That doesn't mean that rising inequality is benign or that there isn't a link — it's just hard to establish empirically, perhaps because of how many other factors are at play. So in recent years, some economists — and even groups like the International Monetary Fund — have started wondering if high levels of inequality might even be detrimental to growth.

La desigualdad no deja de crecer. ¿Deberíamos preocuparnos? - Econstuff | Econstuff Estés a favor o en contra de la existencia de la desigualdad en nuestras sociedades, deberías saber algo: Sus cifras se están moviendo a gran velocidad. Durante los últimos veinte años, el porcentaje de ingresos que reciben los individuos más ricos de una sociedad (el 1% de los más ricos) se ha duplicado del 10% al 20%. Contra lo que uno esperaría, los impuestos que estos individuos pagan se han reducido -de una manera casi drástica en algunos países-. Desde 1970, aquellas sociedades donde más han aumentado los ingresos de los más ricos son también las que más han bajado los impuestos de éstos: Por su parte, estas bajadas de impuestos no parecen haber tenido ninguna repercusión sobre la evolución de sus economías: ¿Es necesario hacer algo? Todas estas cifras escandalizarán a unos, dejarán indiferentes a otros, y hasta tendrán también una buena legión de defensores. Lo que vamos a intentar aquí es enumerar los argumentos que defienden y critican una desigualdad incontrolada. Enlaces:

La peligrosa epidemia de las enfermedades no infecciosas | Planeta Futuro La mayor crisis de salud global de los países de renta media y baja no son las enfermedades infecciosas como muchos pueden pensar. No son los parásitos exóticos, plagas bacterianas o virus raros tropicales que ocupan las grandes iniciativas de salud internacional y la atención mediática. Son, en realidad, las enfermedades no infecciosas —non communicable diseases (NCD), en inglés—, las afecciones cardiovasculares, las respiratorias crónicas, la diabetes o el cáncer, las que mataron a más de ocho millones de personas antes de los 60 años en los esos países en 2013. La Organización Mundial de la Salud (OMS) incluye entre las NCD una amplia categoría de enfermedades crónicas que, por ellas mismas, no se propagan de persona a persona aunque puedan estar causadas por una bacteria o un virus. En los países desarrollados, la mejora de la esperanza de vida explica, en parte, por qué se han incrementado las enfermedades no infecciosas. El reto es reducir un 25% las muertes prematuras en 2025