Friday, January 7, 2011

Panel on economic inequality

This morning began with an interesting panel discussion regarding the relationship between economic inequality and the recent financial crisis. The main presenter was Prof Rajan from Chicago who reviewed the notion that the reaction to growing inequality in our society led to policies that fed the housing bubble. Discussants were Profs Acemoglu and Glaeser.

Acemoglu grabbed my attention by quoting from Robert Dahl and Who Governs...but he tried to politely refute the hypothesis from Rajan. As always, Glaeser had strong numbers showing the weather related connection between housing boom and bust.

In follow-on discussion Prof Glaeser had the insight of the day. That education is the path to improved performance and equality in society. However he recognizes that the policy must be put forward as a matter of national strength and security as inequality is a political non-starter. While I believe we do need to address inequality not necessarily in the context of education.

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