The linearity of the relationship between income inequality and economic development has been long questioned. While theory provides arguments for which the shape of relationship may be positive for low levels of inequality and negative for high ones, most of the empirical literature assumes a linear specification finding conflicting results. Employing an innovative empirical approach robust to endogeneity, we find pervasive evidence of nonlinearities. In particular, similar to the debt overhang literature, we identify an inequality overhang level in that the slope of the relationship between income inequality and economic development switches from positive to negative at a net Gini of about 27 percent. We also find that in an environment characterized by widespread financial inclusion and high income concentration, rising income inequality has a larger negative impact on economic development because banks may curtail credit to customers at the lower end of the income distribution. On the positive side, a sufficiently high female labor participation can act as a shock absorber reducing such negative impact, possibly through a more efficient allocation of resources.

Economic inequality has been of considerable interest to academics, citizens, and politicians worldwide for the past decade–and while economic inequality has attracted a considerable amount of research attention, it is only more recently that researchers have considered that economic inequality may have broader societal implications. However, while there is an increasingly clear picture of the varied ways in which economic inequality harms the fabric of society, there is a relatively poor understanding of the social psychological processes that are at work in unequal societies. This edited book aims to build on this emerging area of research by bringing together researchers who are at the forefront of this development and who can therefore provide timely insight to academics and practitioners who are grappling with the impact of economic inequality. This book will address questions relating to perceptions of inequality, mechanisms underlying effects of inequality, various consequences of inequality and the factors that contribute to the maintenance of inequality. The target audiences are students at advanced undergraduate or graduate level, as well as scholars and professionals in the field. The book fills a niche of both applied and practical relevance, strongly emphasizing theory and integration of different perspectives in social psychology. Given the broad interest in inequality within the social sciences, the book will be accessible to sociologists and political scientists as well as social, organizational, and developmental psychologists. The insights brought together in The Social Psychology of Inequality will contribute to a broader understanding of the far-reaching costs of inequality for the social health of a society and its citizens. "This edited volume brings together cutting-edge social psychological research addressing one of the most pressing issues of our times – economic inequality. Collectively, the chapters illuminate why inequality has negative effects on individuals and societies, when and for whom these negative effects are most likely to emerge, and the psychological mechanisms that maintain inequality. This comprehensive volume is an essential read for those interested in understanding and ameliorating inequality." -Brenda Major, Distinguished Professor, Department of Psychological and Brain Sciences, University of California “This invaluable volume demonstrates the indispensable and powerful contribution that social psychologists can make to our understanding of societal inequality. For those outside of social psychology it provides a unique and comprehensive overview of what social psychology has to offer, and for social psychologists it is exemplary in demonstrating how to make a systematic contribution to the understanding of a hotly debated real-world issue. Scholars and students alike and from various disciplines will gain much from reading this fascinating and inspiring social psychological journey.” -Maykel Verkuyten, Professor in Interdisciplinary Social Science, University of Utrecht “The Social Psychology of Inequality offers a superb and timely social-psychological analysis of the causes and consequence of increasing wealth and income gaps. With its refreshingly international authorship, this volume offers profound insights into the cognitive and social mechanisms that help maintain, but potentially also to overcome, an economy that is rigged in favor of the wealthy. A new and stimulating voice, illustrating science in the service of a fairer and more democratic society.” -Anne Maass, Professor of Social Psychology, University of Padova “This volume assembles an impressive list of leading international scholars to address a timely and important issue, the causes and consequences of economic inequality. The approach to the topic is social psychological, but the editors and chapters make valuable connections to related literatures on socio-structural influences in allied disciplines, such as economics, political science, and sociology. The Social Psychology of Inequality offers cutting-edge insights into the psychological dynamics of inequality and novel synthesis of structural- and individual-level influences and outcomes of inequality. It should attract a wide audience and will set the agenda for research on economic inequality well into the future.” -John F. Dovidio, Carl Iver Hovland Professor of Psychology and Public Health, Yale University

This book is the fifteenth volume in the renowned International Papers in Political Economy (IPPE) series which explores the latest developments in political economy. Containing contributions by experts in the field, this book focuses on topics that address the ongoing debate of inequalities in economic systems. Inequality has been considered a problem by many academics and policy makers for a long time now and recently here has been some evidence of increasing inequalities in society. Contributors to this book focus on the causes and consequences of inequality along with the importance of tackling inequality and recommend potential policies to reduce it, for example tax reforms. The book covers different aspects of inequality - from income to gender - and explores links between inequality and economic growth, and financialisation and financial crisis.

The open access publication of this book has been published with the support of the Swiss National Science Foundation. Are countries capable of reducing economic inequality under conditions of contemporary globalisation without cooperating and coordinating with other countries? While states are far from powerless to effect distributional change within their own sovereign space, Taking a Common Concern Approach to Economic Inequality makes the case that cooperation and coordination is indeed necessary, especially in relation to corporate taxation. It accordingly contemplates the utility of a transnational taxation system that is embedded in cooperative sovereignty through the recognition of rising economic inequality and its deleterious effects – including how increasingly unequal distributions within countries make transnational cooperation and coordination efforts less likely – as a common concern of humankind.

"A brilliantly clear and concise guide. Highly recommended." – Ben Chu Economic inequality in the UK is currently at historically high levels and the rise in income inequality over the last 30 years is one of the largest across developed nations. But what caused this sustained increase in inequality and what does it mean for modern society in the UK? In this book, Economist Mike Brewer discusses the causes and consequences of these high levels of economic inequality, outlining why the UK became so unequal in the 1980s and how this has developed further since the 2008 financial crash and the austerity that followed. Brewer then presents new analysis of the top 1% and 0.1%, before assessing the relevance of Thomas Piketty’s landmark work and predictions around wealth inequalities. The author then outlines six key areas that need addressing to move the UK off its high-inequality path and towards a fairer society, including wealth redistribution, social mobility, and excessive pay at the top. ABOUT THE SERIES: The ‘What Do We Know and What Should We Do About...?′ series offers readers short, up-to-date overviews of key issues often misrepresented, simplified or misunderstood in modern society and the media. Each book is written by a leading social scientist with an established reputation in the relevant subject area. The Series Editor is Professor Chris Grey, Royal Holloway, University of London

This book focuses on income inequality, output-inflation trade-off and economic policy uncertainty in South Africa. Tight monetary and macroprudential policies raise income inequality. Income inequality transmits monetary policy and macroprudential policy shocks to real economic activity. Economic policy uncertainty influences the dynamics in the lending rate margins, inflation expectations, credit, pass-through of the repo rate to bank lending rates and companies’ cash holdings. The trade-off between output and inflation and output growth persistence vary with inflation regimes. Stimulatory demand policy shocks are less effective in high inflation regime. High income inequality raises consumption inequality, which raises demand for credit, but price stability matters in this link. Increased bank concentration raises income inequality, lowers economic growth and employment rate. Elevated economic policy uncertainty lowers output growth, lowers capital formation, reduces credit and raises companies’ cash holdings. Increased companies’ cash holdings reduce capital formation and impact the transmission of expansionary monetary policy shocks to real economic activity. This book shows there is an inflation level within the target band below it which lowers income inequality, while raising GDP growth and employment. Thus price stability, economic policy uncertainty and income inequality matter for the efficient transmission of policy shocks.

The gap between the rich and poor is widening across the globe. This book explores whether this major societal challenge of our time can be addressed by the means of competition law. The primary goal of today's competition law is to ensure that market power does not lead to an inefficient production of goods and services. Nevertheless, even such efficiency-oriented curbing of market power may arguably contribute to the reduction of differences in how much people own and earn. Furthermore, many competition law regimes do take into account distributive considerations too. The chapters investigate the relationship between competition law and economic (in)equality from philosophical, historical, and economic perspectives. Their inquiries concern the conceptual foundations of competition law and doctrinal frameworks of individual jurisdictions, as well as specific problems and markets. As such, the book provides a novel and comprehensive overview of whether and how competition law can contribute to more equality in both developed and developing countries. The book is a must-read for researchers, public officials, judges, and practitioners within the competition law community. It will also appeal to anyone more broadly interested in issues of inequality and economic policy.

South Asia’s Path to Sustainable and Inclusive Growth highlights the remarkable development progress in South Asia and how the region can advance in the aftermath of the COVID-19 pandemic. Steps include a renewed push toward greater trade and financial openness, while responding proactively to the distributional impact and dislocation associated with this structural transformation. Promoting a green and digital recovery remains important. The book explores ways to accelerate the income convergence process in the region, leveraging on the still-large potential demographic dividend in most of the countries. These include greater economic diversification and export sophistication, trade and foreign direct investment liberalization and participation in global value chains amid shifting regional and global conditions, financial development, and investment in human capital.

This report describes the world economic outlook as of April 2018, projecting that advanced economies will continue to expand above their potential growth rates before decelerating, while growth in emerging markets in developing economies will rise before leveling off. It details global prospects and policies, including risks to the forecast, and essential determinants of long-term economic growth: labor force participation in advanced economies, the declining share of manufacturing jobs globally and in advanced economies, and the process through which innovative activity and technological knowledge spread across national borders.

A brilliant introduction to the pleasures of mathematical thinking, this book attempts to convey to general readers the feeling of eureka--the joy of discovery--that mathematicians feel when they first encounter an elegant truth. 92 line illustrations.