Poverty and income inequality

Tessa Bold, Tobias Broer, 16 February 2017

The substantial literature examining risk-sharing practices in rural villages in developing countries has typically taken the social institutions in these communities as given. Using data from India, this column challenges this assumption by showing how the costs and benefits of risk-sharing arrangements can shape these social institutions. The results suggest that the size and nature of these risk-sharing groups may evolve over time as their environment changes. Public policy to reduce consumption fluctuations can be counterproductive in the standard model because of a strong crowding-out effect.

Enrico Spolaore, Romain Wacziarg, 10 February 2017

Since the Industrial Revolution, modern prosperity has spread from its European birthplace to many corners of the world. Yet the diffusion of technologies, institutions and behaviours associated with this process of economic modernisation has been unequal both over space and time. This column, taken from a recent Vox eBook, argues that the divergent historical paths followed by distinct populations led to barriers between them. Although these barriers are deeply rooted, their effect is not permanent and immutable.

Gustavo A. Marrero, Juan Gabriel Rodríguez, Roy Van der Weide, 08 February 2017

Inequality can be both good and bad for growth. Unequal societies may be holding back one segment of the population while helping another. This column exploits US data to argue that inequality affects negatively the future income growth of the poor and positively that of the rich. This relationship is largely driven by inequality of opportunity, which limits the growth prospects at the bottom of the income distribution.  

Daron Acemoglu, James Robinson, 30 January 2017

The immense economic inequality we observe in the world today is the path-dependent outcome of a multitude of historical processes, one of the most important of which has been European colonialism. This column, taken from a recent Vox eBook, discusses how colonialism has shaped modern inequality in several fundamental, but heterogeneous, ways.

Glenn Loury, 22 January 2017

The late Thomas Schelling’s 1960 classic, The Strategy of Conflict, opened up new vistas in the then emergent field of game theory. This personal tribute by a longstanding friend and colleague describes how Schelling’s creative and playful mind, his incredible breadth of interests, and his unparalleled mastery of strategic analysis opened up a new world of intellectual possibilities.

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