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Slow growth creates inequality or the other way around? August 26, 2012

Posted by Sverre in : Political economy , add a comment

Through the Twitter account of Gudmund Hernes, I became aware of a very interesting and thought provoking piece by Alexander Stille, based on the work of French economist Thomas Piketty. Titled “The heirs of inequality”, it highlights the connection between periods of slow growth and much economic inequality. Looking at the French economy from 1820 until today, and Scandinavian and American economies today, there appears to be a clear correlation. The causality is less clear. Does slow growth make for worse income distribution, does a poor income distribution slow growth, or are both effects reinforcing each other?