Poverty and income inequality

Sriram Balasubramanian, 17 February 2019

There has been considerable criticism of the general reliance on GDP as an indicator of growth and development. One strand of criticism focuses on the inability of GDP to capture the subjective well-being or happiness of a populace. This column examines new growth models, paying particular attention to Bhutan, which has pursued gross national happiness, rather than GDP, since the 1970s. It finds evidence of the Easterlin paradox in Bhutan, and draws out lessons for macroeconomic growth models. 

Matthias Helble, Trang Thu Le, Trinh Q. Long, 10 February 2019

The sudden rise in trade between China and the US – known as the ‘China shock’ – has been the subject of numerous studies, but the even more dramatic increase in trade between China and developing countries in Asia has been somewhat overlooked. This column studies the impact of the China shock on income inequality in Vietnam. It suggests that increased trade with China reduced income inequality. It resulted in income growth for the lowest income quantiles while higher income groups saw their income decline.

David Miles, 04 January 2019

If our wealth has been acquired unjustly in the past, does that injustice fade or persist? David Miles of Imperial College tells Tim Phillips how economics can help to answer this question.

Juan C. Palomino, Gustavo A. Marrero, Juan Gabriel Rodríguez, 03 January 2019

The American Dream is grounded in the US being the land of opportunities, but real opportunity requires mobility across generations. This column examines the influence of parents’ income on the income of their children in the US for the period 1980-2010. Parental income has a greater influence, implying lower levels of mobility, for families with the highest and lowest levels of income. Education also plays a stronger role in economic persistence at both tails of the income distribution, while race affects mobility in the middle and lower parts of the distribution. 

Edward Wolff, 23 December 2018

Unlike income inequality, wealth inequality along racial lines in the US has received relatively little attention. This column presents new evidence on the changing landscape of relative wealth among whites, blacks, and Hispanics between 1983 and 2016. Using an augmented measure of wealth, it highlights how cuts to social security will disproportionately affect minorities.

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