Why Do Top Income Shares Matter?
From a recent YouTube lecture by UC Berkeley economist Emmanuel Saez, he discusses income inequality. As an introduction he makes the following claim, and it's pretty clear he doesn't find this very controversial:
He's a pretty conventional, leading academic economist. It's interesting that he can say this as if it's not debatable and move on, because if this is true, many of the fundamental results of economics are simply wrong. For example, there is no risk premium, a theme of my now back ordered book, which discusses why this inconsistency persists.
Yet, I'm pretty much alone in arguing this in finance. In other words, in some fields of economics relative utility is obvious, in others it's applied piecemeal, in others it is not used at all . Such is the science of economics.
Inequality matters because people evaluate their economic well-being relative to others, not in absolute terms
He's a pretty conventional, leading academic economist. It's interesting that he can say this as if it's not debatable and move on, because if this is true, many of the fundamental results of economics are simply wrong. For example, there is no risk premium, a theme of my now back ordered book, which discusses why this inconsistency persists.
Yet, I'm pretty much alone in arguing this in finance. In other words, in some fields of economics relative utility is obvious, in others it's applied piecemeal, in others it is not used at all . Such is the science of economics.
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