Inequality: a great induction topic for A2 economics

The varied nature of Economics means there are so many (sometimes it can seem too many) themes to explore. And priorities change. Sometimes the main issue is production (making more stuff – and how the value of that is measured). Sometimes it’s exchange (looking at how markets work). Yet distribution (often overlooked, especially when economies are booming) seems the hottest topic at the moment. Inequality tops the bestseller lists.

Here are a few tips and links for using the topic as an intro to A2 economics, great for macro, with scope for analysis and evaluation of UK government policy and approaches to development economics.

Stimulus points could include:

1. Looking at and measuring poverty – what’s happening to absolute and relative poverty around the world?
2. Why is absolute poverty falling? Where is it falling fastest? Where is it still entrenched?
3. What do Lorenz curves look like, and how is the Gini co-efficient calculated? Clarify the distinction between income and wealth.
4. Is relative poverty a crucial component in a successful and dynamic economy?
5. “The rich get richer and the poor get poorer”. Discuss.
6. Does inequality hamper growth and poison human development?
7. Is inequality a price worth paying if it is accompanied by rapid growth and living standards?
8. How can inequality be expressed other than by income?

Extension activities

1. What theories are presented for rising levels of inequality within many economies?
2. Evaluate policies that could reduce inequality (a) within economies (b) between economies.

I’ve grouped the links I’m using on this here.