Twitter Roundup: Joseph Stiglitz is Right About Inequalityhttp://www.fool.com/investing/general/2014/03/07/twitter-roundup-joseph-stiglitz-is-right-about-ine.aspx Gaurav Seetharam
March 7, 2014
As a financial journalist, Twitter is indispensable. It's a personal wire service that I customize to suit my appetite for information; an instant way of getting breaking news. Plus I follow some pretty clever people who can cram a lot of insight into 140 characters.
So once a week I curate my favorite tweets and add a little context to help explain an emerging story. This week, new research from the International Monetary Fund (IMF) returned economic inequality to the forefront of national policy discussions. It may sound dull, but if a healthy economy matters to you, stay with me. The implications of this research are enormous.
The paper, written by economist Jonathan Ostry, begins by retesting some of the oldest, sorest sticking points in the study of inequality. The results confirm what Nobel laureate Joseph Stiglitiz has been saying about the impact of inequality on economic growth.
— Matt Bruenig (@MattBruenig) February 27, 2014
But even addressing inequality is a challenge; not least because the policy mechanisms involved (taxes, subsidies, targeted spending programs) are political landmines. It was a surprisingly ambitious move.
— José Swuervõ (@SwerveFervuson) March 4, 2014
Criticisms of the paper ranged from the weak, yet still lucid...
Gini is a broad measure of inequality. The IMF's calculation shows the difference between pre-tax disparities in income and what's left after taxes have been collected and transfers have been made.
...to the paranoid and nonsensical.
There's no conspiracy. Everyone just take a deep breath.
Remember the guy who came up with the "invisible hand"? The grandfather of capitalism? Yeah, even he thought redistribution was ok.
— LSE EUROPP blog (@LSEEuroppblog) February 23, 2014
Making sense of it all
Certainly, some level of inequality is necessary for capitalism to function, but it's clear that too much of it leads to slower growth. Specifically, countries with large gaps between