Question

1. Inequality (in both wealth and income) is generally believed to have increased in the USA over the last few decades.

What are three possible explanations for this? Do they yield similar policy prescriptions to reduce inequality? Should we be reducing inequality in the first place? Would your answer change if you were making a policy for a developing country?

Answer 1

Inequality (in both wealth and income )is generally believed to have increased in the USA over the last few decades. The three possible explanations for this are:

1- Te wealth gap between America's richest and poorer families more than doubled from 1989 to 2016

2- Middle class income have grown at a slower rate than upper tier incomes over past few decades

3- Globalization

Yes they yield similar policy prescription to reduce inequality.

Yes we should be reducing inequality in the first place.