One of the main questions currently circulating economic forums is: does income inequality hurt economic growth? Main concerns about global increases in income inequality have motivated nations to study the potential impacts on societies and economies. According to the Organization for Economic Cooperation and Development, OECD for short; one of the resounding conclusions is that poorer members of society are less able to invest in their education. The OECD consists of 34 democracies with market economies whose goals are to promote policies which would improve the worlds economic and social well-being, their main function is providing a forum to discuss polices as well as gather data that help measure productivity and global flows of trade, their main instruments are providing analyzed and comparable data in order to predict future trends (“About the OECD”).
Across the majority OECD nations, the income gap …show more content…
By looking at the Gini coefficient 16 countries had seen a rise of 5 points in the coefficient during this time, in specific these were reflected in Finland, Israel, New Zealand, Sweden and the United States.
Widening income inequality in lower income levels is significant in its impact on medium-term overall growth. The average inequality growth throughout OECD countries has been recorded at 3 Gini points, this is statistical significant because it estimates that economic growth has been brought down by 0.35% per year over a 25-year time frame. In other words, GDP total loss through this time period has resulted in an 8.5 percent total loss (E.I.I.F. pg 2). Figure 3 reflects how much each individual country’s estimated consequence of changes of inequality on following cumulative growth at the end of the
Across the majority OECD nations, the income gap …show more content…
By looking at the Gini coefficient 16 countries had seen a rise of 5 points in the coefficient during this time, in specific these were reflected in Finland, Israel, New Zealand, Sweden and the United States.
Widening income inequality in lower income levels is significant in its impact on medium-term overall growth. The average inequality growth throughout OECD countries has been recorded at 3 Gini points, this is statistical significant because it estimates that economic growth has been brought down by 0.35% per year over a 25-year time frame. In other words, GDP total loss through this time period has resulted in an 8.5 percent total loss (E.I.I.F. pg 2). Figure 3 reflects how much each individual country’s estimated consequence of changes of inequality on following cumulative growth at the end of the