Tuesday, April 1, 2014
Economics research on income inequality continues to generate widespread interest
An article about income inequality co-written by Professor of Economics Oded Izraeli and Fuad Hasanov, an economist with the International Money Fund, has attracted the attention of several prestigious publications and news outlets – most recently CNN.
The article, “Income Inequality, Economic Growth, and the Distribution of Income Gains: Evidence from the U.S. States,” was featured in John Sutter’s 2013 column for CNN, “99 Must-Reads on Income Inequality.”
Izraeli believes it is the article’s compelling subject matter that has contributed to the widespread interest. “Income inequality and income growth are highly visible in every day news and have gotten the attention of economists, as well as other academic areas, such as social science, political science and media people,” Izraeli says.
The article was inspired by Izraeli’s interest in the “Goldilocks Economy,” one that is not too hot or too cold, but instead sustains moderate growth and a low inflation. He wondered what kind of income inequality would be good for this type of economy.
Izraeli and Hasanov, a former OU faculty member, spent several years going through the economic data from 48 states from the census years 1960 to 2000 in hopes of determining how inequality and growth are entwined.
Ultimately, they concluded that some degree of inequality can generate growth, but heightened inequality may reduce growth. In their article, the two researchers state that policies that strive to encourage growth, while ignoring inequality, tend to be self-defeating. On the other hand, policies that decrease inequality – possibly by encouraging hiring and education – benefit the economy.
Their article went on to be published in the Journal of Regional Science in 2011. Harvard Business Review noticed the article and published an abstract of the research in 2012.
It has been encouraging, Izraeli says, to see the research appear in such high-caliber publications.
“You like your research to gain wide exposure so it can reach more readers, and consequently, the ideas expressed in the research will gain more visibility and influence,” Izraeli says.
Izraeli, who earned his bachelor’s degree at Hebrew University and his master’s and doctorate degrees at the University of Chicago, also has published scholarly articles in Journal of Urban Economics, Urban Studies, Regional Studies, Journal of Environmental Economics and Management, Economic Development and Cultural Change, Transport Economic and Policy, Logistics and Transportation Review and the Annals of Regional Science.
Currently, Izraeli is concentrating his research in two areas. He is investigating the importance of which party, Democrats or Republicans, controls the state government as it relates to success of the state economic performance. He also is researching the quality of education in charter schools, compared to traditional public schools in Michigan.