The divergent incomes theory, model and income inequality

• Main Author: Campos, Jerome Sidney R.
• Format: text
• Language: English
• Published: Animo Repository 2018
• Subjects: Income distribution
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/5610
• Institution: De La Salle University

Our knowledge of income inequality is still somewhat asymmetric as we know more of about the dangers it posses to modern society while knowing somewhat very little of what really causes it to increase intertemporally. Old models such as Kuznets (1955) and Kaldor (1957) no longer seem to be able to explain modern trends in income inequality while other studies have tended to contradict one another. Some more recent explanations such as Piketty (2013), Rognlie (2017), and Stiglitz (2013) seem to have made strides in explaining some aspects of income inequality however these explanations may only be seeing parts of a broader and perhaps more complex picture. This paper thus aims to create an alternative model, the Divergent Incomes Theory and Model, for understanding income inequality and how it may increase or decrease in an economy. At the same time, it also aims at proposing a methodology for operationalizing this model which may be used to identify possible causes for income inequality which addresses case specific scenarios rather than trying to explain income inequality as caused by just one singular and general factor.