Interactions inequality-polarization: an impossibility result

• Juan Prieto Rodríguez ^{[1] [4]} ; Juan Gabriel Rodríguez Hernández ^{[2] [4]} ; Rafael Salas del Mármol ^{[3] [4]}
  1. [1] Universidad de Oviedo

     Universidad de Oviedo

     Oviedo, España

     
  2. [2] Universidad Rey Juan Carlos

     Universidad Rey Juan Carlos

     Madrid, España

     
  3. [3] Universidad Complutense de Madrid

     Universidad Complutense de Madrid

     Madrid, España

     
  4. [4] Instituto de Estudios Fiscales

     Instituto de Estudios Fiscales

     Madrid, España

     

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• Localización: Documentos de trabajo ( Centro de Estudios Andaluces ), Serie 1, Nº. 64, 2004
• Idioma: inglés
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• Resumen

  • Recent literature stresses the multidimensional nature of income distribution. Two of the most relevant components are inequality and polarization. In this paper, we prove the impossibility 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.