Interactions Inequality-Polarization: Characterization Results(*)
Abstract. Recent literature stresses the multidimensional nature of income distribution. Two of the most relevant components are inequality and polarization. In this paper, we show the restrictions of keeping simultaneously constant these two aspects whenever the distribution of incomes changes. Distributional change could originate from any economic policy or simply from economic growth. Hence, our result implies an effective restriction for policymakers that they cannot avoid and should not ignore. Our proof embodies a general view of polarization that includes the Wolfson and the Esteban and Ray approaches. The paper also develops other links for the case of controlling only one variable and deducing the implications for the other variable.
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Bibliographic InfoPaper provided by Instituto de Estudios Fiscales in its series Working Papers with number 15-05 Classification-JEL : D30, D63, H20..
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polarization; inequality; economic policy.;
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