How Much Income Inequality Is Too Much

  title={How Much Income Inequality Is Too Much},
  author={Jean-Philippe Bouchaud},
  journal={arXiv: General Economics},
  • Jean-Philippe Bouchaud
  • Published 2020
  • Economics
  • arXiv: General Economics
  • We propose a highly schematic economic model in which, in some cases, wage inequalities lead to higher overall social welfare. This is due to the fact that high earners can consume low productivity, non essential products, which allows everybody to remain employed even when the productivity of essential goods is high and producing them does not require everybody to work. We derive a relation between heterogeneities in technologies and the minimum Gini coefficient required to maximize global… CONTINUE READING

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