IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v24y2010i3p251-267.html
   My bibliography  Save this article

The systemic nature of the rise in inequality in developed economies

Author

Listed:
  • Pascal Petit

Abstract

The rise in inequality in the last two decades has affected most developed economies. The systemic nature of this inequality is the focus of this paper. A combination of product market internationalization, financial globalization and technological changes favoring large organizations created asymmetric pressure on the two ends of the distribution of market incomes, resulting in greatly increased inequality. A widespread credo of political liberalism prevented governments from using taxes and transfers to check this rise in income inequality. Changes in relative prices and borrowing facilities brought some support to the standards of living of low-income groups but also contributed to increased instability of these economies. The global financial crisis was one of the possible crisis scenarios that rising inequality was bound to produce. The paper assesses the cumulative factors behind the rise in inequality. These factors reduce the capacity of industrial economies to face the challenges of ever-changing environments.

Suggested Citation

  • Pascal Petit, 2010. "The systemic nature of the rise in inequality in developed economies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 251-267.
    • Handle: RePEc:taf:irapec:v:24:y:2010:i:3:p:251-267
    DOI: 10.1080/02692171003701396
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/02692171003701396
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171003701396?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dean Baker, 2006. "The Nanny State," Challenge, Taylor & Francis Journals, vol. 49(4), pages 31-41.
    2. Lucian Bebchuk, 2005. "The Growth of Executive Pay," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 21(2), pages 283-303, Summer.
    3. Fligstein, Neil & Shin, Taek-Jin, 2003. "The shareholder value society: A review of the changes in working conditions and inequality in the U.S., 1976-2000," Institute for Research on Labor and Employment, Working Paper Series qt0z85d717, Institute of Industrial Relations, UC Berkeley.
    4. Dean Baker, 2006. "The Conservative Nanny State," CEPR Books, Center for Economic and Policy Research (CEPR), number 2006-01.
    5. Wynne Godley, 1999. "Seven Unsustainable Processes: Medium-Term Prospects and Policies for the United States and the World," Economics Strategic Analysis Archive 99-10, Levy Economics Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leena Kalliovirta & Tuomas Malinen, 2020. "Non‐Linearity and Cross‐Country Dependence of Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(1), pages 227-249, March.
    2. Cong S. Pham & Mehmet Ali Ulubaşoğlu, 2016. "The role of endowments, technology and size in international trade: new evidence from product-level data," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(7), pages 913-937, October.
    3. John C. Stevenson, 2024. "Death, Taxes, and Inequality. Can a Minimal Model Explain Real Economic Inequality?," Papers 2406.13789, arXiv.org, revised Nov 2024.
    4. Paolo Ramazzotti, 2013. "Shared economic thought and the neglect of social costs. Why progressive economists often stick to conventional wisdom," Working Papers 71-2013, Macerata University, Department of Finance and Economic Sciences, revised Dec 2015.
    5. Filippo Gusella & Anna Maria Variato, 2021. "Financial Instability and Income Inequality: why the connection Minsky-Piketty matters for Macroeconomics," Working Papers - Economics wp2021_15.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivis García & Zafer Sönmez, 2020. "An Asset-Based Perspective of the Economic Contributions of Latinx Communities: An Illinois Case Study," Societies, MDPI, vol. 10(3), pages 1-15, July.
    2. Malleson, Tom, 2014. "After Occupy: Economic Democracy for the 21st Century," OUP Catalogue, Oxford University Press, number 9780199330102.
    3. M. Paula Fitzgerald & Cait Poynor Lamberton & Michael F. Walsh, 2016. "Will I Pay for Your Pleasure? Consumers’ Perceptions of Negative Externalities and Responses to Pigovian Taxes," Journal of the Association for Consumer Research, University of Chicago Press, vol. 1(3), pages 355-377.
    4. Elke Pirgmaier & Julia K. Steinberger, 2019. "Roots, Riots, and Radical Change—A Road Less Travelled for Ecological Economics," Sustainability, MDPI, vol. 11(7), pages 1-18, April.
    5. Jorg Bibow, 2004. "Fiscal Consolidation: Contrasting Strategies & Lessons From International Experiences," Economics Working Paper Archive wp_400, Levy Economics Institute.
    6. Jonathan Temple, 2002. "The Assessment: The New Economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(3), pages 241-264.
    7. Bruno S. Frey & Susanne Neckermann, 2005. "Auszeichnungen: Ein Vernachl�ssigter Anreiz," IEW - Working Papers 254, Institute for Empirical Research in Economics - University of Zurich.
    8. Escobar, Andres, 2016. "Stock-Flow Consistent models for developing countries: The case of Colombia," Conference papers 332805, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Michalis Nikiforos, 2020. "Demand, Distribution, Productivity, Structural Change, and (Secular?) Stagnation," Economics Working Paper Archive wp_945, Levy Economics Institute.
    10. Anwar Shaikh & Dimitri B. Papadimitriou & Claudio H. dos Santos & Gennaro Zezza, 2003. "Deficits, Debts and Growth: A Reprieve but not a Pardon," Economics Strategic Analysis Archive 03-10, Levy Economics Institute.
    11. Roberto Veneziani & Luca Zamparelli & Michalis Nikiforos & Gennaro Zezza, 2017. "Stock-Flow Consistent Macroeconomic Models: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1204-1239, December.
    12. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2019. "Can Redistribution Help Build a More Stable Economy?," Economics Strategic Analysis Archive sa_4_19, Levy Economics Institute.
    13. Dimitri B. Papadimitriou & L. Randall Wray, 2007. "The April AMT Shock: Tax Reform Advice for the New Majority," Economics Policy Note Archive 07-1, Levy Economics Institute.
    14. Canelli, Rosa & Fontana, Giuseppe & Realfonzo, Riccardo & Passarella, Marco Veronese, 2024. "Energy crisis, economic growth and public finance in Italy," Energy Economics, Elsevier, vol. 132(C).
    15. Jackson, Tim & Victor, Peter A., 2015. "Does credit create a ‘growth imperative’? A quasi-stationary economy with interest-bearing debt," Ecological Economics, Elsevier, vol. 120(C), pages 32-48.
    16. Ricardo Correa & Ugur Lel, 2013. "Say on pay laws, executive compensation, CEO pay slice, and firm value around the world," International Finance Discussion Papers 1084, Board of Governors of the Federal Reserve System (U.S.).
    17. Ian Dew-Becker & Robert J. Gordon, 2005. "Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(2), pages 67-150.
    18. Stephanie Bell, 1999. "Functional Finance: What, Why, and How?," Economics Working Paper Archive wp_287, Levy Economics Institute.
    19. Brenner, Steffen, 2011. "On the irrelevance of insider trading for managerial compensation," European Economic Review, Elsevier, vol. 55(2), pages 293-303, February.
    20. Yixi Ning & Chien-Ping Chen & Yingxu Kuang, 2024. "The relative CEO to employee pay for luck," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(3), pages 924-946, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:24:y:2010:i:3:p:251-267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.