This is a good and easily understood article about inequality and economic theory. In neoclassical theory, inequality is not a problem that needs some sort of regulatory or subsidized solution. But in the real world, is this true?
What's Wrong With Ignoring Inequality - Bloomberg View
The real world is not a mirror image to neoclassical theory. Consumers are not predictable, perfect information is not available, and many other economic assumptions are not true in the real world. The United States is not achieving the same levels of GDP growth. This is one of the worst times for the U.S. to experience low levels of growth because the government is still trying to break through to the other side of recovery from the Great Recession. These are consequences are not only short term. Income inequality issues will bleed into future generations. These future generations are going to struggle with opportunities with upward social mobility. The real world will never work identically to economic theory. If that were the case, there would be a lot less economic issues in the world.
ReplyDeletehttp://blogs.wsj.com/economics/2014/08/05/inequality-is-damaging-the-u-s-economy-sp-study-says/?KEYWORDS=income+inequality
And to think that we live within the confines of a restrictive economic model is almost the same as following a very devout and restrictive religion. All about faith and obedience.
ReplyDeleteThe neoclassical theory can no longer in a real business world. The article: The Death Of The Dunkin' Donuts Worker Who Had 3 Jobs Shows How Hard It Is To Live On Minimum Wage" is the best example of how worse the inequality is. It is so important to recognize the inequality issue because inequality can be bad for the health of a nation’s economy and the people.
ReplyDeletehttp://www.businessinsider.com/its-hard-to-live-on-minimum-wage-2014-10