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Economic inequality

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Economic inequality

Economic inequality (also described as the gap between rich and poor, income inequality, wealth disparity, wealth and income differences or wealth gap) is the difference between individuals or populations in the distribution of their assets, wealth, or income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality involves equity, equality of outcome, equality of opportunity, and life expectancy.

Opinions differ on the utility of inequality and its effects. Some studies have emphasized inequality as a growing social problem. While some inequality promotes investment, too much inequality is destructive. Income inequality can hinder long term growth. Statistical studies comparing inequality to year-over-year economic growth have been inconclusive; however in 2011, researchers from the International Monetary Fund published work which indicated that income equality increased the duration of countries' economic growth spells more than free trade, low government corruption, foreign investment, or low foreign debt.

Economic inequality varies between societies, historical periods, economic structures and systems (for example, capitalism or socialism), and between individuals' abilities to create wealth. The term can refer to cross sectional descriptions of the income or wealth at any particular period, and to the lifetime income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality. A prominent one is the Gini coefficient, but there are also many other methods.