Before 1980, few academics in the United States gave much thought to the idea of economic inequality. It just wasn’t a glaring concern. But in the last 30 years, the incomes of the nation’s wealthiest 1 percenthave surged, and more and more economists have been paying attention.￼Read it at The Washington Post | Wonk Blog
Yet there’s still plenty about economic inequality that’s not well understood. What’s actually driving the gap between the richest and poorest? Does it hurt economic growth, or is it largely benign? Should it be reversed? Can it be reversed? Surprisingly, there’s little consensus on how to answer these questions — in part because good data on the topic is hard to come by.
In his fascinating new book, “Inequality and Instability,” James K. Galbraith, an economics professor at the University of Texas at Austin, takes a more detailed look at inequality by assembling a wealth of new data on the phenomenon. Among other things, he finds that economic inequality has been rising in roughly similar ways around the world since 1980. And this rise appears to be driven, in large part, by the financial sector — and the changes that modern finance has forced in the global economy. We talked by phone recently about his book.
How economists have misunderstood inequality: An interview with James Galbraith
Posted by Brad Plumer
(h/t Mark Thoma)