Why focus on inequality?
According to noted NYU development economist Debraj Ray:
“Albert Hirschman’s
tunnel parable is useful (Hirschman and Rothschild, 1973). I present a slightly
altered version. You’re in a multi-lane
tunnel, all lanes in the same direction, and you’re caught in a serious traffic
jam. After a while, the cars in the other lane begin to move. Do you feel
better or worse? At first, movement in the other lane may seem like a good
sign: you hope that your turn to move will come soon, and indeed that might happen.
You might contemplate an orderly move into the moving lane, looking for
suitable gaps in the traffic. However, if the other lane keeps whizzing by,
with no gaps to enter and with no change on your lane, your reactions may well become
quite negative. Unevenness without corresponding redistribution can be
tolerated or even welcomed if it raises expectations everywhere, but it will be
tolerated for only so long. Thus, uneven growth will set forces in motion to
restore a greater degree of balance, even (in some cases) actions that may
thwart the growth process itself.”
Original 1965 Simon Kuznets paper: https://www.aeaweb.org/aer/top20/45.1.1-28.pdf
2014 IMF Discussion Note - Redistribution, Inequality, and Growth by Jonathan D. Ostry, Andrew Berg, and Charalambos G. Tsangarides
Rethinking Economic Growth in a Globalizing World: An Economic Geography Lens by Anthony J. Venables
Redistribution is tricky – Inequality vs. Growth
The Political Economy of Redistribution
Hypothesis: As income inequality rises, support for redistribution falls.
Ethics of Redistribution – It’s Complicated
Economists V. V. Chari and Christopher Phelan examine the ethics of redistribution
https://www.minneapolisfed.org/~/media/files/pubs/region/15-09/region-sept2015-epp-on-the-ethics-of-redistribution.pdf