Equality in Income and Sustainability in Economic Growth: Agent-Based Simulations on OECD Data

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In countries that have developed under the current market economy, inequalities in income distribution tend to increase with three different trends, i.e., high (United States, United Kingdom, Japan), low (North Europe countries), and medium Gini coefficient levels. On the other hand, the relationship between income distribution and social welfare is generally a difficult problem to solve in economics. So, this paper discusses the impact of income distribution on the macroeconomy, limiting the scope to consistency with long-term economic growth. We attempt to answer these economic policy issues by simulation using an agent-based model based on replicator dynamics. As a result of the simulation in this paper, in general, in countries with the high marginal propensity to consume, long-term growth can be maintained by inducing equality in income distribution. On the other hand, a mature country with a low marginal propensity to consume can sustain not so high but stable growth despite increasing inequality in income distribution. According to simulation results based on OECD (Organisation for Economic Co-operation and Development) data, in the former UK, US, and Japan, the lower the Gini coefficient is, the higher the growth potential is, while in the latter Norway and Luxembourg, relatively stable growth is maintained even if the Gini coefficient increases.

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Global Trends in Differentiation of Population Income
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  • D А Huchmazova

Purpose of the study. Identification of global trends in inequality in the distribution of the population income. In accordance with the goal, the following tasks are set: 1) to examine current international research that addresses the problem of income distribution inequality of the population; 2) assess the differentiation of the population income at the global and regional levels; 3) on the basis of the Gini and Theil indexes, to analyze the dynamics of income inequality of the population within and between countries of the world.Materials and methods. In the process of preparing the article, theauthor used data from international reports, analytical statistical materials, scientific works of Russian and foreign scientists. The scientific methods of cognition were used in the work: analysis (to assess changes in indicators of income inequality of the population), synthesis (to determine the relationship between inter-country and intra-country income inequalities of the population), graphical (to build graphs that reflect the dynamics of changes in the distribution of national income and assets among the population, Gini coefficient, Theil index). These methods made it possible to identify the scale and trends in the differentiation of the population income in the world.Results. The problem of uneven distribution of the population income was investigated. It has been established that inequality in the population income differs significantly between regions of the world, and the level of inequality of the population in terms of income within countries is much higher than the level of inequality between countries. An assessment of the current state is given and trends in the differentiation of the population income in the world based on the Gini index and the Theil index are revealed.Conclusion. It has been established that the problem of income differentiation of the population is in the focus of attention of both the scientific community and international organizations, namely: the United Nations, the Organization for Economic Cooperation and Development, the World Bank, Oxfam. The level of differentiation of the population by income between regions of the world differs significantly. The scale of global income inequality of the population now has reached the level that was observed during the heyday of Western imperialism. With the help of the Gini and Theil indexes, it was revealed that intra-country inequality is significantly greater than the inter-country income inequality of the population.

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