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Working Paper No. 505

How Can Economic Policy Strike a Balance between Economic Efficiency and Income Equality?

Working Paper
Reference
Lindbeck, Assar (1998). “How Can Economic Policy Strike a Balance between Economic Efficiency and Income Equality?”. IFN Working Paper No. 505. Stockholm: Research Institute of Industrial Economics (IFN).

Author
Assar Lindbeck

Can income equality be combined with high economic efficiency and rapid economic growth? Fortunately, we need not to answer such a general question. Indeed, the question is poorly phrased. The relationship between income and wealth distribution, on one hand, and efficiency/growth, on the other, depends on how a certain distribution of income and wealth has come about.