The Consequences of Growing Economic Inequality within Advanced Democracies

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In this review essay, I explore the consequences of growing economic inequality within advanced democracies. My aim is not to provide novel empirical evidence but to stitch together disparate threads of existing literature to make the case that growing economic inequality should be viewed as one of the most significant problems afflicting industrialized democratic societies today. I begin by defining the concept of economic inequality and by outlining the methods for measuring this phenomenon empirically. In this section, I encourage scholars to shift away from complex indices in favor of decile ratios that are more legible to the public. Next, I summarize trends in income and wealth inequality within advanced democracies to illustrate the growing scale of the problem in recent decades. Subsequently, I make the case that rising economic inequality should be viewed as a concern of utmost importance for political economists by reviewing the literature in three key issue areas that may be adversely impacted by rising levels of inequality: political equality, far-right populism, and economic growth. In scientific terms, economic inequality is conceptualized as an independent variable, and I examine its impact on relevant dependent variables. I conclude by making a call to action with the hope of mobilizing scholars across countries and academic disciplines to study the determinants of rising economic inequality, and to advocate for policy measures to combat the problem.