How to manage and address fairness in market economies at a time inequality keeps increasing? Professor Jean-Paul Chavas, University of Wisconsin-Madison, proposed some lines of thought at a seminar organised jointly by the EIB Institute, the University of Luxembourg (coordinated by MARS – Multidisciplinary Area of Research on Sustainability, Faculty of Language and Literature, Humanities, Arts and Education) and other partners as part of the “Inequality and…” series..
At a time when distribution of income is skewed toward higher incomes, Prof. Chavas explained, stimulating growth is not sufficient to redistribute income fairly. But in market economies, he warned, fairness – defined as the absence of envy among individuals – can be inconsistent with economic efficiency can be inconsistent with economic efficiency as it can vary in different groups or different societies.
Fairness concerns are better expressed within social networks (the family, the State) and are best addressed by non-market institutions that can redistribute purchasing power through tax policy or welfare payments (the State) or remittances (the family), he concluded.
Click here for the presentation.