inequality in income distribution has increased in recent years significantly in many countries. The current crisis is broadening these differences, even in advanced economies. Economists Thomas Piketty and Emmanuel Sáez have demonstrated in the case of the U.S., the value of the indicators of income distribution is now equivalent to those in 1928, on the threshold of that other crisis, parallel to the present, which triggered the Great Depression. It is in this country that are carrying out various investigations into the causes and consequences of the enlargement of that inequality. The following notes discuss some consequences of the hand of the evidence regarding the influence of inequality in three areas: trust within societies, the determination of the financial crisis, and the generation of wars as far force in some countries of northern Africa and Middle East. Try to keep out judgments and considerations of the moral philosophy of Adam Smith held that in A Theory of Moral Sentiments, a quarter century before he published his Wealth of Nations. Advance the general conclusion excessive inequality in income distribution is not conducive to sustainable economic growth, it is not profitable for the whole society.
- Inequality and trust. confidence among economic actors, and these in their institutions, is part of this new form of capitalism, socialism, which, without prejudice to the necessary expertise, enables collaboration forms of generating social gains. It is considered a factor that enhances the growth and other economic variables. Some recent studies show the negative correlation between inequality in income distribution and confidence. Shaun P. Hargreaves Heap, Jonathan HW Tan and Daniel John Zizzo (Trust, inequality and the market) also reached important conclusions about the influence of the distribution of income in the trust that project participants in a market. Evidence also exists in the field of business, such as Steven Covey has illustrated: the business is adversely affected if the trust is eroded.
OECD data illustrate that is the economies of Denmark, Norway, Finland, Sweden and Netherlands, where a higher proportion of individuals showing confidence in others. The international competitiveness of these economies, the intensity of advantages based on knowledge and quality of human capital is as enviable as the main indicator of welfare, GDP per capita. Analysts also concluded that institution that high inequality in the distribution is negatively correlated with trust.
- Inequality and financial crisis. of the consequences it is having the crisis on inequality of income and wealth of evidence are numerous. So are the effects in terms of disaffection, distrust increase, agents basic economic institutions on the economic system in developed economies. More suggestive, and less easy to guess, is to verify that it is precisely the expansion of the gap between rich and poor one of the causes of the crisis. In an IMF paper (Inequality, leverage and crises), released last November, it is argued that the high leverage of households and the subsequent financial crisis arising due to changes in income distribution. The empirical analysis, based in the U.S., focusing on 1920-1929 and 1983-2008. Both periods preside over a very considerable increase in the share of the rich in the distribution of income and wealth, a rise in the leverage of others and, finally, a real financial crisis. This reflects, according to the researchers, changes in bargaining power on the income of each other.
From another perspective, a recent survey of economists O. RH Dijk and A. Frank and political scientist Levine in the 100 most populous counties in the USA concluded that where the inequality in income distribution grew faster also recorded the largest increases in financial stress, as measured by various indicators, including bankruptcies.
The most popular theory in this regard is that of R. Rajan, IMF chief execonomista Chicago professor. In an article last July (How Inequality fueled the crisis) and advanced detailed conclusions in his book Faultline. His assertions are blunt: "As cynical as it may sound, easy credit has been used throughout history as a palliative for those governments unable to respond directly to deepest anxieties of the middle class." According to Rajan, the expansion of home ownership, one of the essential elements of the American dream-a low-income families was the key to achieving the wider objectives of expansion of credit and consumption. Was the growing gap in income distribution which stimulated the credit boom that ended precipitating the financial crisis. The paradox, which also notes the author, is that the severity of the crisis is helping to significantly reduce the number of owners by the most dramatic of foreclosures.
Although other economists, including MIT professors, D. Acemoglu, or S. Johnson has qualified the relevance of these policy objectives of indirect distribution, gives much more attention to the dynamics of financial innovation created by the operators themselves bank Rajan causal linkages have great relevance.
- Inequality and conflict. excessive inequality is also being called as one of the most important in all diagnoses are made on the conflicts in North Africa and Middle East. They have done so, it is true that a little later, the World Bank and IMF. Among academic economists, Kenneth Rogoff has been the most forceful. Exresponsable also research at the IMF and Harvard professor, in an article last February (wildcard Inequality in current crisis), stressing that "within country income inequality, wealth and opportunities is higher than at any other time of the last century, "says the" high unemployment, the obvious inequality in the distribution of income and wealth, and the high prices of basic commodities, "as major triggers of conflict in Africa and the Middle East.
CONCLUSION. Without encroaching on the field of moral philosophers holding to more concrete cost-benefit analysis, there appears to be sufficient evidence that inequality is not profitable. Avoid enlargement maintain the trust and reduce the likelihood of other forms of instability. We would do well, therefore, become a public policy priority that goal. Also in the English economy, specifically cited the Rogoff's article as one of the cases where it is harder to reconcile the development of measures budgetary austerity to reduce an unemployment rate that, when that article was published, I was still at 20% of the population.
Emilio Ontiveros, COUNTRY
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