Stories
Slash Boxes
Comments

SoylentNews is people

posted by cmn32480 on Friday June 19 2015, @11:27AM   Printer-friendly
from the spread-the-money-around dept.

A new study (abstract and free PDF available) authored by several economists at the IMF (International Monetary Fund) reveal an inverse relation between increases in inequality and GDP growth. In what could also be considered a heavy blow to trickle-down economic theory, data analyses show (page 7) that increases of income share on the fifth quintile actually hurt growth, while increases in any other quintile favours growth with the lowest quintile showing the strongest push.

From the abstract:

We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 1) by khallow on Friday June 19 2015, @08:27PM

    by khallow (3766) Subscriber Badge on Friday June 19 2015, @08:27PM (#198410) Journal
    I'm pointing out that the problem isn't as severe as claimed. And it strikes me that people who figure out how to save money, don't stay poor.
  • (Score: 2) by c0lo on Friday June 19 2015, @08:40PM

    by c0lo (156) Subscriber Badge on Friday June 19 2015, @08:40PM (#198415) Journal
    So, your view is: the situation is not that grave, society can afford to let it go worse?
    --
    https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
    • (Score: 1) by khallow on Friday June 19 2015, @09:46PM

      by khallow (3766) Subscriber Badge on Friday June 19 2015, @09:46PM (#198446) Journal
      Yes, society can afford to let it get worse. But there's no reason to do that. My view however is that there are deeper problems which are being aggravated by the emphasis on income inequality. Making poor people slightly less poor is a relatively noble goal, but I think there's more to be gain, including reduction of poverty in the long term, from making a more economically viable society.
  • (Score: 0) by Anonymous Coward on Friday June 19 2015, @09:19PM

    by Anonymous Coward on Friday June 19 2015, @09:19PM (#198434)

    IOW, you have no experience being poor or experience with the poor.

    • (Score: 1) by khallow on Saturday June 20 2015, @02:01PM

      by khallow (3766) Subscriber Badge on Saturday June 20 2015, @02:01PM (#198675) Journal

      IOW, you have no experience being poor or experience with the poor.

      Which isn't true. But I do have considerable experience with elevating myself from poverty and learning how to save and invest money.

  • (Score: 3, Touché) by tathra on Friday June 19 2015, @11:22PM

    by tathra (3367) on Friday June 19 2015, @11:22PM (#198487)

    I'm pointing out that the problem isn't as severe as claimed.

    you're claim that people blowing all their money on drugs is unsupported and definitely not as widespread as you're trying to claim. a similar claim to yours is that welfare recipients blow all their money on drugs, yet the facts show [thinkprogress.org] this is not the case. vice-spending increases during tough times, but not to the levels you're suggesting.

    • (Score: 1) by khallow on Saturday June 20 2015, @01:57PM

      by khallow (3766) Subscriber Badge on Saturday June 20 2015, @01:57PM (#198670) Journal

      you're claim that people blowing all their money on drugs

      Alcohol and cigarettes are drugs too.