Category Inequality
Rates, rents, shares, and capital theory
I think this is the technology that Paul Krugman has in mind: 1. C + Kdot = A.La.K(1-a) C is consumption, K is the capital stock, Kdot is investment, L is employment, A is a parameter that represents productivity, a is a parameter that (in competitive profit-maximising equilibrium) will equal labour's share of national income, […]
What is the link between labour’s share of income, financialisation, and income concentration?
Bruce Bartlett draws attention to three developments in the US economy over the past 30 years or so: The declining share of labour in national income in the US The growing 'financialisation' of the US economy The concentration of income at the top of the US income distribution.
Production of Robots by means of Robots.
(Sorry about the title. The devil made me write it.) What are we afraid of? Let's think about the worst-case, nightmare scenario for the distribution of income. Assume that all capital is robots, and robots are perfect substitutes for human workers. One robot can produce everything and anything one human worker can produce. And that […]
How much revenue can the Quebec government generate by increasing tax rates on high earners?
The newly-elected Parti québécois government wants to (among other things) eliminate the 'health tax' introduced in the 2010 budget and make up the shortfall by introducing two new tax brackets at the top end of the income distribution: 28% for taxable incomes above $130,000 31% for taxable incomes above $250,000 The current top Quebec rate […]
Inequality rules
Last March, Bell Canada Enterprise circulated its 2012 executive compensation policy: we use three key elements of compensation with an aggregate target value positioned at the 60th percentile of what is paid in the competitive market for similar positions. A few weeks later, Human Resources minister Diane Finley announced "a more efficient and responsive temporary foreign […]
“Does monetary policy have (bad) distributional consequences?”
Some questions are bad questions. This is one of them. We can get a clearer and more useful answer if we change the question. We can avoid wasting a lot of time arguing at cross purposes. Here's a better question: "If we used fiscal policy instead of monetary policy to remove a shortage of aggregate […]
Morals? Can’t afford them.
Noahpinion, Tyler Cowen and others have recently posted about the deserving poor.
Some identification problems in the debate on taxing top earners
Two recent papers on top-earner taxation have made an important contribution to the policy debate on the topic, but it seems to me that we still have some way to go before we have an understanding of the phenomenon that is robust enough to use as a basis for policy.
Provincial Government Health Spending: The Equity Dimension
The meeting of the federal and provincial/territorial health ministers in Halifax on Thursday will be preoccupied with the sustainability of health expenditures and the coming negotiations over the renewal of the health care accord. Naturally, the provinces want to ensure that federal transfers continue to rise to meet their needs while the federal government will […]
On ‘first-order’ and ‘top-end’ inequality, and why the distinction is important
The debate about income inequality seems to be happening at two levels, which I'm going to label "first-order" and "top-end" inequality. First-order inequality is visible in standard measures such the gini coefficient, and shows up as an increase in the gap between average and median incomes. Top-end inequality refers to the share of income that […]
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