This part applies all the previous findings to a fully worked out example. The aim is mainly to explore the tradeoff between efficiency and inequality/poverty, in order to verify when, at least in some instances, a greater degree of inequality can improve the economy’s total productivity, hence also the incomes (and consumptions) of the less favored, i.e. those belonging to the poorest part of the society which, in modern economies, is protected to varying degrees by the P.A., against too low income (and consumption) levels.
Social Welfare Income Distribution Economic Agent Social Welfare Function Individual Income
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