Relationship Between Inequality And Economic Growth

Global discourse around the issue of growing inequality and specifically inequality of opportunity has come to the fore in recent years driven by violent public action witnessed in the spring of 2011. A little southern town in Tunisia known as Sidi Bouzoid in December 2010 took global centre stage in the push for economic emancipation. Mohamed Bouazizi, a fruit vendor vented his frustration with the local corrupt municipality by setting himself ablaze which inadvertently sparked a series of protests across the Arab world. Enter the ‘Arab Spring’ led by disenfranchised youth. Researchers in attempts to diagnose the inspiration for the ensuing revolutions hypothesised stark inequality between economic and political elites and the larger population, as the fuel behind the flame.

In China on the other hand, the distribution of income has been unfairly distributed. China’s poorer residents have benefited more compared to the wealthier residents. This rise in income inequality began when former leader

China is divided into two regions: the eastern zone, which has much better agriculture, and the various deserts on the west. The Eastern side itself is also divided into two regions, separated by various mountain ranges.

Although the income inequality is very serious in china, some economists based on “Kuznets's Inverted U-Curve Hypothesis”, still argue that is good for Chinese economy. The income inequality is the reasonable products of industrialization. They believe that China is in the initial stage of industrialization, so the income inequality is positive to Chinese economy like proving cheap labour force. However, they ignored many serious damage of income inequality to Chinese society and future economic growth.

1. China is divided into two major geographical regions: the steppe, desert, and high plateau west and northwest; and the eastern zone, more suitable for settled agriculture.

Gan, Li, et al. "Reducing Inequality: Taking From The Top To Distribute At The Bottom." China Perspectives 2013.3 (2013): 80-82. Academic Search Complete. Web. 29 Oct. 2015. Gan et al. examine the true scope and detail of the income disparity present in contemporary Chinese society. This work examines the introduction of government measures, the criticisms and inadequacies of these supposed measures, other potential solutions that have been proposed, as well as whether or not the Chinese government has the true ability and willingness to carry out the new

Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).

For many years wealth and income inequalities in America have progressively gotten worse. The recession in 2007 did not help to reduce the gap. Wealth is determined by everything a person owns and income is determined by how much a person makes at their job. The better job a person has the more income they have and this increases their overall wealth. Wealth and income inequality can be reduced by lowering the cost of higher education, implementing a progressive tax, working with one another to end the stigma of the color of ones skin, and by putting an end to the gender wage gap.

According to the OECD, the term inequality in the opposite of equity can be defined as evenness

We live in a day and age that is immensely affected by wealth distribution and the rapid growth of inequality. With the middle class disappearing as we speak and President Obama’s presidency coming to an end, many are curious about where America is headed next. The Center for Research on Globalization reports that “the yearly income of a US household dropped by a massive 12 percent, or $6,400, in the six years between 2007 and 2013” (Doman). Yet, many Americans remain oblivious to how seriously the economy’s crisis is affecting them and still place hope in the “American Dream”. Meanwhile, the rich continue to gain wealth while the poor are divulging quickly

Income inequality is a pressing issue in the United States of America. “The unequal distribution of household income or individual income is called the Income Inequality”. It is presented as the percentage of income to a percentage of population. Joseph Stiglitz, a Nobel-prize winning economist is a professor at Columbia university and the Chief economist at the Roosevelt Institute talks about income inequality in one of his interviews with The Atlantic (Nov 2, 2015). He believes that income inequality can be stopped by the citizens and the politicians of the United States before it gets worse. He states that in the years between 2009-2012, 91 percent of all income growth was relished by the wealthiest 1 percent of Americans, and the bottom 99 percent did not benefit.

Income inequality is been a problem in this country for awhile now. Though the median household income has risen about thirty percent the top one percent has skyrocketed nearly two-hundred percent. Though unemployment is falling the and the distribution of income is rising. Even President Obama said economic inequality is the defining challenge of our time.

Dr. Hao Jingfang works for the China Development Research Foundation which helps advance and promote economic development and social progress. She conducts research with an emphasis on rural poverty and presents recommendations to the government. Dr. Hao has witnessed and learned about China’s development over the last century, such as the Cultural Revolution-the birth of communist ideals- and capitalism. China transformed their system and has been ascending economically for the last several decades. Dr. Hao Jingfang had also witnessed its side effects: the excellent ever increasing gross domestic product(GDP) and the not so good effects of increased poverty. Another one of the of the not so spectacular side effects are how the wealth,

To begin with, all men are not created equal, they live different lives and posses different abilities. Although some people possess greater talents than others, no person is better than any other person; such as a celebrity or a homeless person. People who possess great talents that are useful to society are often accepted and more recognized, but then bring down those who are different as in color or sex so that they may not practice their skills.

Much has been written about Economic inequality and how it affects various aspects of quality of life. The literature is varied with recent works such as Richard Wilkinson and Kate Pickett’s Spirit Level which suggesting that economic inequality has a detrimental effect on several factors such as increased crime, increased obesity, and worse mental health within a country. Whilst other authors have seen economic growth as part of the development process as outlined by Simon Kuznets. Whilst there has always been a wide range of literature on inequality, this literature has expanded significantly since the Financial Crisis of 2008. The financial crisis seems to have sparked a vast amount of public disapproval which has been reflected in the increased literature and popularity as shown through French economist Thomas Piketty’s best-seller ‘Capital in the Twenty-First Century’