Exercises for seminar 8 (the last seminar)

Hi everyone,

For the last seminar we are going to discuss inequality. Please re-read Piketty and Saez paper on inequality ("The evolution of top Incomes", listed under specialized readings) and Milanovic (2016) "Global Inequality", Chapters 1 and 2. We will discuss the following questions:

1) Measuring inequality (repetition)

a) What does the GINI coefficient measure?

b) What does the top income share (used by Piketty and Saez) measure?

c) How would you compare the two measures?

2) Milanovic (see ch. 1 and particularly the "elephant graph" on page 11)

a) What is meant by the global middle class?

b) How yould you explain its reason rise?

3) Kuznets Curve and Kuznets Waves (see ch. 2 in Milanovic)

a) What is the Kuznets curve?

b) What does Milanovic mean by his "Kuznets Waves"?

c) How would you relate the Kuznets curve to the decline in inequality that occurred throughout the developed world during most of the 20th century?

d) How do you think the Kuznets curve explanations could / could not relate to Schumpeter's process of "Creative Destruction"?

4) Inequality in the 20th Century (see Piketty and Saez, 2006)

a) Is the U-shaped development in inequality equally strong in all countries?

b) Do you think the development fits with the Kuznets curve explanation?

c) Do you think the development fits with the Schumpeterian "Creative Destruction" view?