define all relevant concepts.
1.For France and the United States, describe and compare the changes in income inequality that took place between 1910 and 2010 (measured by the share held by the top 1% and top 10%). Discuss:
a. The relationship between wage inequality, wealth inequality and total income inequality;
b. the historical trends in each country in both wage inequality and wealth inequality; and
c. what explanatory factors Piketty claims led to these differences between the two countries and changes overtime in each country.
d. According to Piketty:
i. Has inequality of wealth returned to the levels of the past?
ii. Should we expect it to in the future?
iii. What policy changes could alter this result?
2.Describe the Skill Biased Technological Change (SBTC) explanation of rising wage inequality in the United States since the 1970s. As part of your answer, include:
e. What determines the supply and demand for skills in the SBTC framework;
f. How wages are set in the SBTC theory, and how can workers increase their wages in this framework.
g. A supply and demand graph that summarizes the changes as described by the theory, depicting the relative employment and wage of skilled workers relative to unskilled workers (clearly indicate the old and new equilibrium values and label axes).
h. Discuss some criticisms of the SBTC argument.
i. What alternative explanations do critics put forward as driving rising inequality in the United States since the 1970s?
j. Do you find the SBTC explanation convincing? Why or why not?
3.What are some of the normative reasons that a society may want to limit economic inequality and/or reduce poverty rates? As part of your answer, discuss:
k. Trends in the advanced developed nations with respect to income inequality from 1910-2010;
l. The human capital or achievement model of income determination;
m. What has been happening with income mobility in the wealthy developed economies overtime; and
n. How government policy changed from 1910 -2010 with respect to taxes on income and on inheritance/estates.