Ethics and Economics of Inequality: Insights and Data Analysis
Explore the correlation between income inequality, unemployment rates, and economic trends in the US and Europe through insightful data analysis presented by James K. Galbraith. The visuals depict the evolution of inequality over time, reflecting on socio-economic factors and policy implications.
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The Ethics and Economics of Inequality James K. Galbraith The University of Texas at Austin Frank Bryant Lecture UTHSCSA October 20, 2011
The US: Inequality in Pay and Unemployment, 1952-2005 .11 .028 .10 .026 .09 .024 .08 .022 .07 .020 .06 .018 .05 .016 .04 .014 .03 .012 Unemployment rate (left) Inequality of manufacturing pay (Theil index, right) .02 .010 55 60 65 70 75 80 85 90 95 00 05 Inequality measured on earnings across industries in manufacturing, monthly data; recessions entered in gray.
The US: Income Inequality and the NASDAQ, 1969-2006 0.045 9 Internet Bubble 8.5 0.04 8 7.5 0.035 Tax Reform Act 7 Th e i l ' s T Sta t i sti c ( 1 yr l ag) - 0.03 6.5 6 Inequality Log of NASDAQ 0.025 5.5 Na tu ra l Log of Nas daq Mo n th l y Cl o se Co un ty I nc o me I n e qua l i ty - 5 0.02 Be tw e en 4.5 0.015 4 1969 19 70 1971 19 72 1973 197 4 1975 197 6 1 977 197 8 1 979 1980 1 981 1982 19 83 1984 19 85 1986 19 87 1988 198 9 1990 199 1 1 992 199 3 1 994 1 996 1997 19 98 1999 20 00 2001 20 02 2003 200 4 2005 Income inequality measured between counties, from tax data 199 5
U.S. Income Inequality Between Counties 1969 2005 Plotted Against the NASDAQ Composite, with Three Counterfactual Scenarios of Inequality Growth from 1994 2000 0.045 9 Between-County Income Inequality -Theil's T Statistic (1yr lag) 8.5 0.04 8 Natural Log of Nasdaq Monthly Close 7.5 0.035 Without Manhattan 7 0.03 6.5 6 Without Silicon Valley Without Top 15 0.025 5.5 5 0.02 4.5 0.015 4 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Contribution of European Provinces to Inequality Across the European continent, late 1990s.
A Stylized Augmented Kuznets Curve Inequality Kuwait Brazil China Korea USA Denmark Income
The Common Movement of Inequality Measured within Countries, Across Time 0.5 9/11 Inequality Between Countries 0.4 The Super Bubble 0.3 0.2 0.1 End of Bretton Woods 0 Profit Share in OECD -0.1 -0.2 Debt Crisis -0.3 Note: The vertical axis represents the time element in a two-way fixed effects panel regression, across the panel of country-year observations. Vertical scale is log(T) units. Source: Kum 2008.
An Example of Declining Inequality in the Post Neo- Liberal Era: Argentina after the Crisis of 2002. 0.2 0.04 0.2 Contribution to Theil's T Statistic 0.04 0.15 0.15 0.03 Contribution to Theil 0.1 0.1 finance Theil's T Statistic 0.03 0.05 0.05 petroleum 0.02 mining 0 0 0.02 -0.05 -0.05 0.01 -0.1 -0.1 0.01 -0.15 -0.15 0.00 1994 1996 1995 1997 1996 1998 1997 1999 1998 2000 1999 2000 2001 2002 2003 2004 2005 2006 1994 1995 2001 2002 2003 2004 2005 2007 2008 Agriculture, Livestock, Hunting and Forestry Textiles and leather Supply of electricity, gas and water Wholesale & Retail trade and workshops Transport, Storage and Communications Real estate, business services and rentals Social services, private education and health Mining and quarrying Petroleum derivatives and chemicals Construction Hotels & Restaurants Financial Intermediation Civil service, defense, organizations and entities abroad Other service activities Santa Fe City of Buenos Aires Neuqu n Santa Cruz Chubut Tierra del Fuego Formosa La Pampa San Luis Catamarca R o Negro Chaco Corrientes San Juan La Rioja Misiones Jujuy Santiago del Estero Districts of Gran Buenos Aires Salta Entre R os Mendoza Tucum n C rdoba Rest of Buenos Aires Province Theil
