Explore new measures of inequality and poverty
There is a long debate on how one should measure inequality or poverty. The first part of the lecture will focus on the pros and cons of using the consumption distribution to measure inequality and poverty, rather than more traditional measures based on income or wages. The second part of the lecture deals with the underlying determinants of consumption inequality, on why economic shocks can lead to spreading of consumption inequality, how households can cope with these shocks, and how their response depends on the development of insurance and credit markets. The questions addressed include: how should we measure consumption? how does consumption respond to income shocks? why do people respond in different ways? can fiscal policy raise consumption demand? Empirical illustrations draw on data for Europe and North America.