It’s getting more super being super-rich

Globalisation has reduced the bargaining power of unskilled workers and pushed up inequality in many western countries, the OECD said, urging governments to improve their social safety nets.” With the gap between rich and poor widening once again, the media have been considering the impact of widening income and wealth distribution. The articles below look at this widening gap and also at the ways in which the rich are using their money.

Gap between rich and poor widens Guardian (20/6/07)
For the super-rich it’s all give and take – at record levels Guardian (20/6/07)
Looking after the super-rich BBC News Online (Evan Davis blog) (9/8/07)

Questions

1.	Define what is meant by the terms (i) Lorenz curve and (ii) Gini coefficient.
2.	Using illustrations as appropriate, show how the Lorenz curve and the value of the Gini coefficient have changed in the past decade.
3.	Assess the likely impact on the major macroeconomic targets of growing income inequality.
4.	Discuss policies that the government could put in place to try to reduce the level of income inequality.