Money & Macro Talks Inequality is not the problem | prof. Lane Kenworthy
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Feb 27, 2026 Lane Kenworthy, a UC San Diego sociology professor and author, challenges common assumptions about inequality. He contrasts moral concerns with empirical evidence. He reviews causes of rising inequality, methods for testing effects across countries, links to opportunity, political influence, health and happiness puzzles, and practical policy responses focused on public goods and wage supports.
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Inequality Could Help Or Hurt Growth Depending On Mechanism
- Theories predict both positive and negative links between inequality and growth (savings vs demand/fairness).
- Because both mechanisms are plausible, empirical data are required to adjudicate which dominates.
Top Wealth May Fuel Bubbles But Evidence Is Weak
- High top wealth can chase risky assets, potentially fueling bubbles, but cross-country studies find no consistent link between inequality and financial crises.
- Atkinson and Morelli found no robust correlation across financial crises and inequality.
Measuring Opportunity Through Intergenerational Mobility
- Equality of opportunity is usually measured by intergenerational income mobility using rank comparisons or elasticities.
- Data are limited; available comparable data show the U.S. has lower mobility than Nordic countries but cross-country comparisons are few.
