Equality and Efficiency: The Big Tradeoff [Arthur M Okun] on *FREE * shipping on qualifying offers. Book by Arthur M Okun. Equality and Efficiency: The Big Tradeoff (A Brookings Classic) [Arthur M. Okun, Lawrence H. Summers] on *FREE* shipping on qualifying offers. Arthur Okun is known mainly for Okun’s Law, which describes a linear relation In Equality and Efficiency, the Big Tradeoff Okun introduced the metaphor of the.

Author: Sasar Meramar
Country: Belize
Language: English (Spanish)
Genre: Spiritual
Published (Last): 2 January 2005
Pages: 414
PDF File Size: 3.33 Mb
ePub File Size: 11.3 Mb
ISBN: 396-4-53275-234-5
Downloads: 18068
Price: Free* [*Free Regsitration Required]
Uploader: Zuhn

Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth. For example, the initial reforms that ignited growth in Equwlity involved giving stronger incentives to farmers.

The Big Tradeoff” Arthur Okun explains why both the state and the market is needed for an equitable and efficient society. And this new edition includes “Further Thoughts on Equality and Efficiency,” a paper published by the author two years later. Amazon Efficciency Cloud storage from Amazon.

Follow the Author

Ostry PDF version Is there a trade-off between the two or do they go hand in hand? Letters may be edited. For most of the book he anx a lot of character assumptions but at the end he actually really ties things together. Sheds considerable light on Receive emails when we post new snd of interest to you.

These cases, and our broader statistical analysis of a large number of growth episodes, suggest that inequality is an underlying feature that makes it more likely that a number of factors—external shocks, external debt, ethnic fractionalization—come together to bring a growth spell to an end.

Then we increase each variable, one variable at a time, and sfficiency at what happens to expected duration. Chart 3 shows the length of growth spells and the average income distribution equa,ity the spell for a sample of countries. In recent work Berg, Ostry, and Zettelmeyer, ; and Berg and Ostry,we discovered that when growth is looked at over the long term, the trade-off between efficiency and equality may not exist.

To achieve this, we increase each variable by an amount such that it moves from the median value to a value greater than that observed in 60 percent of the sample a 10 percentile increase.

One example off the top of my head: Even the poorest of countries have managed to get growth going for several years, only to see it peter out.


Read more Eficiency less. A systematic look at this experience suggests that igniting growth is much less difficult than sustaining it Hausmann, Pritchett, and Rodrik, Hazard to sustained growth Somewhat surprisingly, income inequality stood out for the efficency and robustness of its relationship with the duration of growth spells: Most thinking about long-run growth assumes implicitly that development is something akin to climbing a hill, that it entails more or less steady increases in real income, punctuated by business cycle fluctuations.

Where growth laggards differ from their more successful peers is in the degree to which they have been able to sustain growth for long periods of time. When Okun died unexpectedly at the age of just 51 in Marchhe was hailed as an innovative and effective policy economist who was unique in holding the respect and admiration of both academic economists and practical politicians.

Sheds considerable light on today’s obsession with inequality. Against this background, the question is whether a systematic look at the data supports the notion that societies with more wnd income distributions have more durable growth. History has not been kind to some of his proposals in that regard. Equality and Efficiency is the perfect embodiment of that legacy, valued both by professional economists and those readers with a keen interest in social policy.

Finance & Development, September – Equality and Efficiency

One reasonably firm conclusion is that it would be a big mistake to separate analyses of growth and income distribution. Known for his wit as well as his compassion, Okun reacted to surging inflation in the s by developing an economic indicator he dubbed the Misery Indexwhich charted the well-being of Americans by combining the unemployment rate feficiency inflation rate. We argue that income distribution may equalityy independently—belong in this pantheon of critical determinants of growth duration.

But its age, subjectivity, and average writing make this a take-it-or-leave-it for me.

Bring Back the Bureaucrats: The Economics of Inequality. The Big Tradeoff Washington: Inhe cofounded, with George Perry, the Brookings Papers on Economic Activity BPEAwhich is still among the world’s most prestigious economic journals and currently boasts sixteen Nobel Prize winners among its authors. Amazon Music Stream millions of songs.

A book with a lot of assumptions. I always wondered why Arthur Okun did not author more equaliry, and then I realized that, sadly, he passed away at a relatively early age. This increased the income of the poor and reduced overall inequality as it gave a tremendous spur to growth. Oil wealth in the s initially financed large increases in the public sector, particularly in public employee wages, which proved very difficult to cut when oil prices fell.


Granting that this was written before behavioral economics arthyr off, the book omits almost entirely any influence of human nature affecting the policies he proposes. Okun was a master of analogies. More inequality may shorten the duration of growth, but poorly designed efforts to reduce inequality could be counterproductive. Get to Know Us. Looking at such cases, Pritchett and other authors have concluded that an understanding of growth must involve looking more closely at the turning points—ignoring the ups and downs of growth over the horizon of the business cycle, and concentrating on why some countries are able to keep growing for long periods whereas others see growth break down after just a few years, followed by stagnation or an.

Inequality matters for growth and other macroeconomic outcomes, in all corners of the globe. However, even accepting this as more of an informal work than an academic work, there are some serious shortcomings in the arguments. Essential Microeconomics for Public Policy Analysis.

This artgur show the world that we can create incredible amounts of wealth and use the excess to lift up the financially down trodden. But in others, the experience is more like a roller coaster. We compare the risk that the spell will end in a given year with the values of these variables in previous years—at the beginning of the spell or the previous year—to minimize the eqhality of reverse causality.

The late Yale University and Brookings Institution economist said that not only can more equal distribution of incomes reduce incentives to work and invest, but the efforts to redistribute—through such mechanisms as the tax code and minimum wages—can themselves be costly.