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Economists analyze income inequality, find stunning patterns

Economists analyze income inequality, find stunning patterns

The World Economic Forum, well-known for its annual winter conference, published a new report. The “Inclusive Growth and Development Report” study examines the dependence between the growth of the country’s economy and the social and economic inequality. This study followed the research made by French economist Thomas Picketty.

The economists analyzed 112 economies across the globe and divided them into four categories, depending on income level:

Advanced;

Upper-middle;

Lower-middle:

Lower income.

The report says that no country does well with growing the economy and reducing income inequality simultaneously. But there are some tendencies that show the most successful regions.

Northern Europe is on the top

The economists of the Swiss nonprofit graded all 112 countries and spotted 10 countries with the better policies that allow to raise the living standards for both rich and poor citizens. To define countries with the better economic policy, Davos’ economists compared these countries in seven different policy domains:

Employment;

Corruption and Rent;

Education;

Fiscal Transfers;

Asset Building;

Basic Services;

Financial Intermediation.

Curiously, 6 of 10 countries with higher ranks are concentrated in the North of Europe. These countries are the Netherlands, Finland, Denmark, Switzerland, Luxembourg, and Norway. As for the U.S., it is the only country with an advanced economy where medium living standards are not growing. Moreover, the level of median household income was declining over the last ten years, according to Gemma Corrigan, a World Economic Forum’s economist. European countries, on the other hand, still keep the pace with growth, even despite an economic crisis.

There are other symptoms of regional similarity for countries in Eastern Europe or Latin America. Economists suggest that the similarity or economic level within a number of countries in one region may be the real example of a strong role and influence of a shared culture and traditions.

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