Lucas vs. Lucas : On Inequality and Growth

Lucas (2004) asserts that "Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution... The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production." In this paper we evaluate this claim using an extended version of Lucas' (1987) welfare-evaluation framework. Surprisingly, we find that the welfare costs of inequality outweigh the benefits of growth in most cases. These calculations support the case for a research agenda that treats not only growth but also inequality as a priority.
Publication date: January 2007
ISBN: 9781451865813
$18.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
English
Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Development - Economic Development , Public Policy- Social Policy , Welfare costs , inequality , social welfare , country inequality , welfare function , welfare measures , Distribution , General Aggregative Models , Consumption , Saving , Production , Employment , And Investment

Summary