Labor

Three major crises are confronting the world. The first is the increasing and uneven burden of humans on the biosphere, and the observation that we have already surpassed the ‘safe operating space’ for humanity with respect to three planetary boundaries: climate change, the nitrogen cycle and biodiversity loss.

In the last few years the impact of income distribution on macroeconomic dynamics has received growing academic attention.

How can we distribute growth globally when the developed world needs growth to emerge from debt overhangs and inequality between nations is still quite formidable?

Long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises

Higher income inequality in developed countries is associated with higher domestic and foreign indebtedness

Does greater inequality produce more fragile economic dynamics? Does concentration of wealth and income make societies more prone to crisis? If so, why?

Inequality did not increase during the early stages of economic development in Japan and the East Asian Tigers. But in India and China it did. Why is that?

This paper describes the broad evolution of inequality in the world economy over the past four decades, and provides a summary account of the relationship between inequality, economic development, political regimes and the functional distribution of income.