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Microeconomic And Economic Inequality

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Economics
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University of Miami
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Running Head: MICROECONOMIC THEORY 1
Microeconomic and Economic Inequality
Name
ECO301
Dr.S
Nov 14
th
, 2019

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Introduction
Since the Great Recession, macroeconomics has changed. The role or rational expectations have
received significant attention, and economic inequality is suspected to be among the factors that
led to the Great Recession (Sturn & Van, 2013). Over the decades, economic inequality has been
rising in many economies, including the most advanced ones like the US (Penalosa, 2018). Income
incorporated all forms of revenues from salaries, wages, and savings accounts, dividends from
share, interests, and even profits. The actual figure does not encompass the stock, the value of
homes, and other forms of possessions. Income inequality is a global challenge that impacts
economic growth and development and the efforts of eradicating poverty. The following is a
discussion on the macroeconomic theory of economic inequality.
Global Income Inequality
The World Income Inequality Report established that in 2018, income inequality was lowest in
Europe and the highest in the Middle East (2018). The inequality in the world region differs
significantly. About 10% of the total national earners contributed the total national income of 47%
in US-Canada 41% in Russia, 46% in China, 37% in Europe, and almost 55% in Sub Saharan
Africa, Indian and Brazil. The situation worsens in the Middle East, with 10% of the earners
contributing to 61% of the national income. From the 1980s, income equalities have been
spreading exponentially in China, India, Russia, and North America, but it has grown moderately
in Europe (World Inequality Report, 2018). A combination of several factors attributes the
condition, and among them is a disparity in education and an unfair taxation system that targets
the low-income earners. The lower growth rate in Europe is attributed to some fiscal policies like
wage-settling in favor of the low and middle-income earners. However, inequality still prevails
between men and women, especially at the top income distribution.

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Running Head: MICROECONOMIC THEORY Microeconomic and Economic Inequality Name ECO301 Dr.S Nov 14th, 2019 1 2 Introduction Since the Great Recession, macroeconomics has changed. The role or rational expectations have received significant attention, and economic inequality is suspected to be among the factors that led to the Great Recession (Sturn & Van, 2013). Over the decades, economic inequality has been rising in many economies, including the most advanced ones like the US (Penalosa, 2018). Income incorporated all forms of revenues from salaries, wages, and savings accounts, dividends from share, interests, and even profits. The actual figure does not encompass the stock, the value of homes, and other forms of possessions. Income inequality is a global challenge that impacts economic growth and development and the efforts of eradicating poverty. The following is a discussion on the macroeconomic theory of economic inequality. Global Income Inequality The World Income Inequality Report established that in 2018, income inequality was lowest in Europe and the highest in the Middle East (2018). The inequality in the world region differs significantly. About 10% of the total national earners contributed the total national income of 47% in US-Canada 41% in Russia, 46% in China, 37% in Europe, and almost 55% in Sub Saharan Africa, Indian and Brazil. The situation worsens in the Middle East, with 10% of the earners contributing to 61% of the national income. From the 1980s, inc ...
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