Economics 2150A/B Study Guide - Quiz Guide: Real Wages, Pessimism, Distribution Of Wealth

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Colin Denniston

Document Summary

The real wage debate and inequality: estimate nominal wages by occupation and deflate with cost of living. Optimists view- mostly improving conditions, reflected in purchasing power and material welfare. Less substantial drop in cost of living after napoleonic war. Optimists: rising inequality with trickle down": everyone better off but rich got richer. Pessimists: rising inequality without trickle down": rich got richer and poor might even be poorer. Labour gets a lower share of ny- allen evidence supports this when using real wages (not clark"s nominal) Capital (or land) increases profit rates dramatically during ir (allen: capital getting paid off not labour)- needed to support pessimists" claims are unrealistic (clark) Wealth distribution of top 1% of society- get much higher levels in share of wealth. Capitalism doesn"t seem to have increased inequality in. Lindert and williamson (1983): real wages doubled in mid 19c, cost of living fall faster than nominal wages.