Inequality in the Advanced Countries

  • Antimo VerdeEmail author


In the advanced countries, inequality has reached immoral levels. By 2015, according to the 2017 OXFAM Report, 8 individuals held the same wealth as 3.6 billion people around the world, i.e. poorest half of humanity. The middle class is directly damaged by the very bad income and wealth distribution. Indeed, inequality is defined as the ratio between the increasing income (or wealth) of the rich and the middle class’ stagnating average income (or wealth). Inequality increases because of domestic factors (i.e. cuts of welfare state and unfavourable evolution of wages) or because of external factors such as skill-biased technological changes, outsourcing, and unfair trade. In one word: because of globalization. Thus after migration, inequality (or globalization) is another problem damaging middle class. This is important in our story. Policy maker should target the reduction of inequality: not for ethical reasons but for economic ones. In fact, the economic growth is sustained by inequality reduction. At the end of this chapter, the author suggests a proposal of a redistribution policy coordinated and funded at EMU’s level. It should be able to assure an inclusive growth (i.e. with equality and efficiency, to avoid the tradeoffs that preoccupied Okun [1975]) for all its Member States.


Inequality Inequality causes and consequences Inequality and growth Inequality and banking crises Equality and efficiency 


  1. Acemoglu, D. (2011). Inequality and financial crisis. New York: Mimeo.Google Scholar
  2. Atkinson, A. (2015). Inequality. What can be done. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  3. Atkinson, A., & Morelli, S. (2015). Inequality and crises revisited. Economia Politica, 32(1), 31–52.Google Scholar
  4. Autor, D., Dorn, D., & Hansen, G. H. (2013). The China syndrome: Local labour effects of import competition in the United States. American Economic Review, 103(6), 2122–2168.Google Scholar
  5. Bernanke, B. (2005). The global saving glut and the US current account deficit. Sandridge Lecture (Federal Reserve speechs).Google Scholar
  6. Bordo, M., & Meissner, C. (2012). Does inequality lead to a financial crisis? VOX, 24(3).Google Scholar
  7. Brandolini, A. (2016). Riflessioni sparse in margine al dibattito sulla disuguaglianza. In R. Morese & M. Colombo (Eds.). Saggi e testimonianze per Carniti. Roma: Edizioni Lavoro.Google Scholar
  8. Brandolini, A., Casadio, P., Cipollone, P., Magnani, M., & Rosolia, A. (2007). Employment and growth in Italy in the 1990s: Institutional arrangements and market forces. In N. Acocella & Riccardo Leoni (Eds.). Social Pacts, Employment and Growth. A reappraisal of Ezio Tarantelli’s Thoughts Rome.Google Scholar
  9. Feldstein, M. (1999). Reducing poverty not inequality. Public Interest, 137, 33–41.Google Scholar
  10. Furceri, D., & Loungani, P. (2014). Who let Gini out? Searching for sources of inequality. VOX, 13 feb.Google Scholar
  11. Kaldor, N. (1961). Capital accumulation and economic growth. London: Macmillan.Google Scholar
  12. Krugman, P. (2008). Trade and wages, reconsidered. Brooking Papers on Economic Activity, 1, 103–154.Google Scholar
  13. Kuznets, S. (1955). Economic growth and income inequality-American. Economic Review, 45, 1–28.Google Scholar
  14. Milanovic, B. (2016). Global Inequality—A new approach for the age of globalization. Cambridge, MA: Harvard University Press.Google Scholar
  15. Okun, A. (1975). Equality and efficiency. The big trade-off. Washington, DC: Brookings Institution.Google Scholar
  16. Ostry J., Berg A., & Tsangarides C. (2014). Redistribution, inequality and growth. IMF Staff Discussion Note 14/02.Google Scholar
  17. Oxfam. (2017). An economy for the 99%.
  18. Rajan, R. G. (2010). Fault lines: How hidden fractures still threaten the world economy. Princeton and Oxford: Princeton University Press.Google Scholar
  19. Samuelson, P. (2004). Where Ricardoand Mill rebut and cofirm agreements of mainstream economists supporting globalization. Journal of Economic Perspectives, 18, 135–146.CrossRefGoogle Scholar
  20. Stiglitz J. (2012). The price of inequality. NY: W.W. Norton.Google Scholar
  21. Summers, L. (2014). US economic prospects: Secular stagnation, Hystresis and the zero lower bound. Business Economics, 49(2), 65–74.CrossRefGoogle Scholar
  22. Verde, A. (2012). Unione monetaria e nuova governance europea. Roma: Carocci Editore.Google Scholar

Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.Tuscia UniversityViterboItaly

Personalised recommendations