PSC 1001 Chapter Notes - Chapter 3: Diminishing Returns, Gini Coefficient, Industrial Revolution
Document Summary
Other big changes that have affected the global economy over the last 3 decades: technological advances, globalization, changing role of the state. Imf has shown that growth is more sustained when inequality is moderate rather than extreme. High inequality results in social divisions >> inefficient. Inequality rose in most countries after the industrial revolution until 1920: declined until 1980, started up again in 1990. La has the highest level of inequality. Higher in developing countries than in advance countries: us is an exception. Us: between 1970 and 2012 the share of market income going to the top 1% doubled to 20% while real household income for the bottom 10% grew by only 3. 6% Skill-biased technological change has increased the demand for skills, capital relative to unskilled labor: labor saving technologies, people who can"t world process and spreadsheet software and navigate the internet are not qualified. People face competition from machines or software.
