Book review: the great leveler: violence and the history of inequality from the stone age to the twenty-first century by Walter Scheidel

In The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, Walter Scheidel offers an account of how ‘Four Horsemen’ – warfare; revolution; state collapse; and pandemics – have been the primary mode through which income levelling has occurred throughout history. While this is a key contribution to the study of inequality, Roberto Iacono hopes it will inspire scholars to highlight alternative paths and interpretations based on peaceful levelling

Stable Shallow Water Vortices over Localized Topography

Abstract It is shown that a sufficient condition for stability by P. Ripa, based on the monotonicity of the flow potential vorticity (PV), can be used to prove linear stability of isolated shallow water vortices over localized topographic features. Stable axisymmetric vortices over axisymmetric topography that satisfy Ripa's condition are explicitly constructed by using a simple two-step, fully analytic approach. First, for a given velocity profile, the topography is found that yields a steady-state, constant-PV solution of the shallow water equations. Then, this topography is slightly modified to obtain new steady solutions, with monotonic PV, that satisfy Ripa's stability criterion. Application of this procedure shows that modest depressions (elevations) can stabilize cyclones (anticyclones) with small Rossby and large Burger numbers and velocity profiles similar to those observed in mesoscale oceanic vortices. The stabilizing topographic features have radial sizes comparable with that of the vortex (about twice the radius of maximum speed) and maximum vertical size, normalized to the unperturbed fluid depth, from 2 to 3.3 times the Rossby number for the profiles considered. The upper limit corresponds to a Gaussian profile, whereas the lower limit is approached by a velocity profile that is linear inside the vortex core and a cubic polynomial outside. Finally, it is argued that a similar stabilization mechanism holds for two-dimensional (2D) flows, and a method for the construction of stable 2D shallow water vortices over 2D topography is outlined that is analogous to that used for the axisymmetric problem. In the 2D case, however, it is generally not possible to obtain stable equilibria analytically

Book review: Measuring poverty around the world by Anthony B. Atkinson, edited by John Micklewright and Andrea Brandolini

The meticulous and passionate editorial work of John Micklewright and Andrea Brandolini has enabled the publication of Measuring Poverty Around the World, a posthumous opus from Anthony B. Atkinson, a leading and inspirational authority in the field of poverty and inequality. This book demonstrates the strength of Atkinson’s legacy for future generations of poverty scholars and underscores how the centrality of poverty to the political debate makes its measurement both a vital and delicate task, writes Roberto Iacono

Book review: capitalism, alone: the future of the system that rules the world

If capitalism has triumphed to become the sole socio-economic system globally, what are the prospects for achieving a fairer world? - reviewed by Roberto Iacono. Capitalism, Alone: The Future of the System That Rules the World. Branko Milanovic. Harvard University Press. 2019

The change in relative prices from Ricardo to Sraffa

In the 1960, when “Production of commodities by means of commodities” by Piero Sraffa was published, the theoretical debate in economics was dominated by the keynesian and neoclassical economists. The theory of value and distribution of the classical economists had been abandoned. Sraffa recalls this theory in his book, providing a new rigorous formulation of the surplus approach and creating the framework which will serve as a basis for future critiques of the marginalist approach. The crucial issue is the theoretical formulation of the change in relative prices with respect to changes in the distribution of income. The scope of this paper is to shed light on the historical development of this aspect of the theory. At first I will reconsider the work done by D.Ricardo, subsequently the innovations brought by Sraffa will be analyzed, with their implications for the capital controversy debate and the general critique to the neoclassic theory of value.Sraffian economics; relative prices; capital controversy;

A micro perspective on r > g

By exploiting large-scale administrative data on estimated gross and net personal wealth in Norway from 2010 to 2018, this paper establishes the first microlevel analysis of the difference between the real return on wealth and the real growth rate of total pretax income across the entire net wealth distribution. We show that for the top 40% of the distribution, aggregate R − G underestimates its micro counterpart r − g, while the opposite happens for the bottom 60%, indicating that micro r−g qualifies as a more precise measure to analyze the dynamics of income and wealth inequality thoroughly

Behavioral responses to wealth taxation: evidence from a Norwegian reform

We analyze behavioral responses to wealth taxation, estimating the causal effects of a unique municipal wealth tax reform in Norway. We exploit variation from the single-period municipal reform reducing the marginal tax rate (MTR) on wealth exclusively in the northern Norwegian municipality of Bø from 0.85% to 0.35%, since 2021. Mimicking the behaviour of a tax haven, Bø represents the first municipality to unilaterally reduce the municipal wealth tax rate since the establishment of wealth taxation in Norway in 1892. We document a significant 66.6% increase in average taxable wealth in response to a 1 percentage point drop in the wealth tax rate. The elasticity of taxable wealth increases to 71.6% when focusing exclusively on wealth taxpayers. We also estimate a significant but more modest 10.3% jump in the weighted mass of wealth taxpayers in the treated municipality. Non-real effects of the reform dominate: mobility of wealthy taxpayers appears as the major behavioral response to the change in the net tax rate, accounting for a staggering 79% of the post-treatment total net wealth in the treated municipality (up from 19% in the pre-reform period). These results emerge in a context with third-party reported wealth data with negligible measurement error, limited evidence of bunching, highly enforced residence-based wealth taxation, and a low degree of out-migration rates

The Kidder Equation: uxx+2xux/1−αu=0

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/111960/1/sapm12073.pd

(Mis-)perceptions, information, and political polarization

Voters hold widespread misperceptions about society, which have been documented in numerous studies. Likewise, voters demonstrate increasing political polarization over policy preferences. Against this backdrop, it is intuitively appealing to think that information provision can help correct misperceptions and create common ground by enhancing the political conversation and bridging political divisiveness. We show, using a general population survey in the United States, that beliefs in the power of information to reduce polarization are indeed widespread. Additionally, we review the extensive literature on misperceptions. To investigate the empirical relationships between misperceptions, information, and political polarization, we exploit the fact that many studies investigate heterogeneities in misperceptions and/or in the reaction to information treatments. Our review shows that existing misperceptions often, but not always, appear to be associated with an increased sense of divisiveness in society; however, information provision is more likely to increase polarization than decrease it. The reason is that different societal groups exhibit differing reactions to truthful and accurate information, in ways that often strengthens, rather than mitigates, existing preference schisms. Thus, the intuitively appealing suggestion that information provision can serve as a powerful tool to reduce polarization is often proven false

The Basilicata Wealth Fund: resource policy and long-run economic development in Southern Italy

This paper contributes to the growing political economy literature of within-country natural resources management, by proposing a new resource policy for the oil-rich southern Italian region of Basilicata. The policy proposal is to establish a (regional) wealth fund in which all the royalty revenues from non-renewable natural resource exploitation in Basilicata would be stored and fully converted into low-risk financial assets. The scope is to give priority to long-run investments as to better exploit revenues from large-scale extraction of natural capital. Establishing a wealth fund at the regional sub-national level is a novel approach that can be applied to other resource-rich regions in the world. I label the fund as the Basilicata Wealth Fund (BWF). The BWF would be a regionally owned investment fund, however independently administered from national authorities (for instance, as an independent legal entity under the jurisdiction of the Bank of Italy). In addition, the paper posits a transparent and clear-cut spending fiscal rule in order to let regional authorities use the resource revenues to finance economic policy. The clear advantage from the BWF would be the stronger focus on long-run economic development and the higher accountability, hence avoiding misuse of resource revenues for myopic fiscal spending